**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
   **FORM
        10-KSB/A**
 **Amendment
            No.****2******
  x Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
        1934
 For
        the fiscal year ended **December
        31, 2004**
  o Transition
        report under Section 13 or 15(d) of the Securities Act of 1934
 For
        the
        transition period from _______ to _______
  **UNIVEC,
        INC.**
 (EXACT
        NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
  **Delaware**
              **0-22413**
              **11-3163455**(State
                  or other jurisdiction
              (Commission
                  File Number)
              (IRS
                  Employerof
                  incorporation)
              
              Identification Number)
  **4810
        Seton Drive, Baltimore, MD 21215**
 (Address
        of principal executive offices)
  **(410)
        347-9959**
 (Registrant’s
        telephone number, including area code)
  **N/A**
 (Former
        Name or Former Address, if Changed Since Last Report).
  Check
        whether the issuer: (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days.
 Yes x No o
  Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B contained in this form, and no disclosure will be contained,
        to
        the best of registrant's knowledge, in definitive proxy or information
        statements incorporated by reference in Part III of this Form 10-KSB or any
        amendment to this Form 10-KSB. x
  Revenues
        for the issuer's most recent fiscal year were $19,448,388.
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes o No x
  The
        aggregate market value of the voting stock held by non-affiliates computed
        by
        reference to the closing price at which the stock was sold on August 31,
        2005
        was $1,693,933.
  -1-
 ISSUERS
        INVOLVED IN BANKRUPTCY PROCEEDINGS  DURING THE PAST FIVE YEARS
  Check
        whether the issuer has filed all documents and reports required to be filed
        by
        Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
        under a plan confirmed by a court. Yes o No o
  APPLICABLE
        ONLY TO CORPORATE REGISTRANTS
  As
        of
        August 31, 2005 the issuer had 56,464,432 shares of common stock, $.001 par
        value, outstanding.
  DOCUMENTS
        INCORPORATED BY REFERENCE
 None
  -2-
  Part
        I
  Item
        1.
        Description of Business.
  UNIVEC,
        Inc. ("UNIVEC" or "the Company") is an integrated licensing, manufacturing,
        and
        marketing company dedicated to providing safer health products to patients
        and
        caregivers worldwide. Univec also assists  pharmaceutical companies in
        marketing, fulfillment, and tracking drug samples. Univec produces auto-disable
        and safety syringes. The Company is a Delaware corporation incorporated on
        October 7, 1996, and the successor by merger to UNIVEC, Inc., a New York
        corporation, incorporated on August 18, 1992.
  On
        December 31, 2001 Univec, Inc., acquired Physician and Pharmaceutical 
Services, Inc., (PPSI) a company engaged in group purchasing (GPO) and
        promoting  Pharmaceutical company prescription samples to physicians for
        their patients. PPSI reduces the cost in the prescription-sampling channel
        by
        providing efficient fulfillment and tracking of prescription usage. PPSI's
        national network of pharmacies fills the sample prescription on a discounted
        fee
        and the Company's mail service fulfillment complements additional needs.
        PPSI's
        approach conforms to regulations requiring increased accountability and
        elimination of diversion of prescription  samples, consequently reducing
        the exposure of physicians and pharmaceutical companies to potential liabilities
        and non-compliance penalties. PPSI’s group purchasing programs provide for
        reduces prices on prescription drugs and other products through leveraged
        purchasing and closed system market share. Univec also is a distributor of
        a
        highly r egulated
        pharmaceutical drug, methadone and other prescription drug
        products.
  Univec
        during late 2004 established the company as a distributor of specialty and
        highly regulated pharmaceutical products. The company intends to expand the
        product line to take further advantage of its group purchasing and closed
        systems purchasing.
  Univec
        extended its product line to include a highly regulated pharmaceutical
        (methadone) and other pharmaceutical products. The company will continue
        to sell
        it products through large United States based wholesalers as well as direct
        in
        large bulk to the larger customers of the company. The company’s group purchase
        programs and closed market purchasing positions the company’s product line
        well.
  In
        1997,
        Univec commenced production and sales of its 1cc Auto-Disable Syringes
        (AD-syringes), which are designed to make accidental or deliberate reuse
        difficult. The accidental or deliberate reuse of syringes is a frequent cause
        of
        the spread of the human immunodeficiency ("HIV") and hepatitis viruses, as
        well
        as other blood-borne pathogens. Univec has received 510(k) clearance from
        the
        U.S. Food and Drug Administration (the "FDA") to market it's AD-Syringes
        in the
        United States.
  Univec
        believes that its 1cc difficult-to-reuse syringes are more effective than
        competitive syringes and that they are competitively priced. Univec also
        believes that it is the only company that markets an AD-Syringe with a 1cc
        barrel, which is ideal for dispensing accurate dosages of medicine (e.g.,
        allergy, immunization and insulin medicines). It is more difficult to deliver
        up
        to a .95cc dosage accurately with a syringe barrel that is greater than 1cc.
        Univec does not know of any other company that offers a lcc aspirating syringe
        that can be locked. Healthcare workers need aspirating syringes to mix
        medications in the syringe barrel and inject medications intravenously.
        Furthermore, Univec believes that aspirating syringes are preferred by diabetes
        patients and needle-exchange programs. Pursuant to programs of international
        relief agencies, Univec has shipped its lcc AD-Syringes to over 80
        countries.
  Univec
        also manufactures and markets patented Sliding Sheath Syringes designed to
        protect patients and healthcare workers from needle stick injuries, in
        compliance with the Federal Needlestick Safety and Prevention Act of the
        United
        States government, and requirements of the Occupational Safety and Health
        Administration (OSHA). Univec has FDA approval for an extendible barrel sleeve
        syringe used in the sliding sheath syringes based on technology licensed
        by
        Univec.
  In
        addition, Univec has developed a Bifurcated Needle Safety Syringe specifically
        designed to comply with the Federal Needlestick Safety and Prevention Act
        of the
        United States government. Univec has been granted 510(k) clearance by the
        FDA.
        The device is intended for use in administering smallpox vaccines in response
        to
        potential bio-terrorist threats. The Needlestick Safety mandate requires
        all
        U.S. healthcare providers to evaluate and implement safer medical devices
        under
        their OSHA "Exposure Control Plans". All healthcare providers must now adopt
        safer devices to protect workers and others from needles potentially
        contaminated with blood borne pathogens such as hepatitis B, hepatitis C,
        and
        HIV.
  -3-
 In
        general, this "safer device" rule applies in the normal course of operations,
        as
        well as in connection with any mass immunization program authorized by the
        federal government.
  Univec
        markets its AD-Syringes and Sliding Sheath Safety Syringes to governments
        of
        developing countries, provided that such syringes are manufactured in the
        United
        States, private hospitals and health facilities in the United States, and
        distributors in the United States.
  Problems
        Associated With Traditional Disposable Syringes
  In
        developing countries, accidental or deliberate reuse of disposable syringes
        poses a serious risk of transmitting HIV-AIDS, hepatitis and other blood-borne
        pathogens. Relief agencies, including UNICEF and WHO, administered almost
        a
        billion immunizations to women and children through immunization programs
        in
        developing countries in 1998 and anticipate administering 3.5 billion
        immunizations by 2005. WHO reported that surveys carried out in four of its
        six
        regions indicated that up to a third of immunization injections were unsterile.
        Immunization injections account for less than 10% of injections administered
        within the health sector. The United Nations estimates that more than half
        of
        all non-immunization injections in developing countries are unsafe. According
        to
        WHO, an estimated 40.0 million adults and children worldwide are infected
        with
        HIV, 90% of who live in developing countries.
  Intravenous
        drug users, who share syringes or use syringes discarded by hospitals, medical
        clinics and laboratories, doctors or diabetic patients, are extremely
        susceptible to HIV, hepatitis and other blood-borne pathogens. An article
        in the
        May 1996 American Journal of Public Health for Disease Control written by
        an
        epidemiologist for the Center for Disease Control and Prevention (the "CDC")
        estimates that nearly half of all new HIV infections are occurring in
        intravenous drug users. In the United States, up to 30% of pregnant mothers
        infected with HIV transmit the virus to their babies, according to the CDC.
        Based on a study of children with HIV, who received care at Children's Hospital
        of Wisconsin, researchers estimated that the mean total lifetime costs of
        caring
        for a child with HIV was close to $1 million.
  As
        a
        result of findings in the United States and developing countries, public
        health
        officials have encouraged the medical industry to develop safer syringes
        to
        prevent the spread of blood-borne pathogens, such as HIV and hepatitis. In
        1995,
        the House of Delegates -- American Medical Association requested "manufacturers
        of disposable hypodermic needles and syringes to adopt designs to prevent
        reuse
        and to include in the packaging clear directions for their correct disposal."
        In
        late 1995, UNICEF and WHO recommended "the use of auto-disable syringes instead
        of disposable, single use syringes in order to avoid the hazards of unsafe
        injection practices."
  Needlestick
        Prevention
  Needlestick
        prevention devices are designed to prevent accidental puncture injuries to
        health care workers and patients before, during, and after the use of hypodermic
        syringes and needles. Statistics indicate that less than 1% of all reported
        HIV
        infections in the United States are attributed to needlestick injuries. The
        most
        prevalent needle stick prevention device, the extendible barrel sleeve, is
        not a
        substitute for features that render a syringe difficult-to-reuse; however,
        it
        can be combined with devices that make a syringe difficult-to-reuse. Needlestick
        prevention methods include:
  Retracting
        Needles retract the needle into the barrel after use. These devices are
        effective needlestick prevention devices; however, operators must manually
        trigger the retraction of needles. Retracting needle devices that automatically
        trigger with a single use of the syringe can render the syringe design difficult
        to reuse. However, such devices are costly to manufacture due to the complexity
        of the mechanics required to retract the needle.
  Self-Destruct
        Needles permit the needle to be collapsed or deformed into a shape, which
        cannot
        result in a needlestick injury. Although self-destruct needle devices are
        mechanically simpler than retracting needle devices, less prone to malfunction
        and less costly to manufacture, such devices are effective only if the operator
        triggers the self-destruct feature.
  Extendible
        Barrel Sleeves enclose the barrel of the syringe in a second cylinder. The
        operator extends the sleeve before and after use to cover the tip of the
        needle.
        The extendible barrel sleeves often lock in the extended position after use.
        In
        virtually all designs, the operator of the syringe must manually extend the
        barrel sleeve after use. The sleeve does not prevent multiple use of the
        syringe
        before the operator encloses the barrel. However, extendible barrel sleeves
        are
        more cost-effective than the other alternatives and can be combined with
        a
        device that makes the syringe difficult to reuse.
 -4-
 UNIVEC
        Syringes
  Univec
        has developed a 1cc AD-Syringe for aspirating and non-aspirating applications,
        which are ideally suited for dispensing accurate dosages of allergy,
        immunization and insulin medicines. The Company's 1cc AD-Syringe can deliver
        dosages of up to .95cc. With the aspirating syringe, the UNIVEC locking clip
        does not limit the user's ability to withdraw and depress ("to aspirate")
        the
        plunger until the user locks the syringe voluntarily. With the non-aspirating
        syringe, the UNIVEC locking clip limits the user's ability to aspirate the
        plunger and locks the syringe passively.
  When
        the
        non-aspirating syringes are assembled, the syringe clip is placed on the
        ratcheted plunger in the position needed to limit dosage as desired. When
        the
        operator depresses the plunger, the clip travels down the barrel by an equal
        distance. Withdrawal of the plunger by any amount embeds the prongs into
        the
        barrel and the user cannot retract the plunger.
  Univec's
        1cc non-aspirating syringe was developed for the needs of immunization programs.
        Using existing components, the Company can limit its non-aspirating syringe
        to
        any dosage between .05cc and .95cc.
  Univec's
        1cc aspirating syringe works similarly to the non-aspirating model, except
        that
        the clip prongs do not engage the barrel until the operator withdraws the
        plunger completely. Once the operator does so, the clip catches a
 single
        ratchet and travels down the barrel as the plunger is depressed and the operator
        cannot withdraw the plunger.
  Univec's
        1cc aspirating syringe was developed for healthcare workers, who need to
        mix
        medications in the syringe barrel and inject medicines intravenously.
        Furthermore, the Company believes that aspirating syringes are preferred
        by
        diabetes patients and needle-exchange programs. The Company does not know
        of any
        other company that offers an aspirating syringe that can be locked.
  Univec
        has licensed rights to a United States patent for a sliding sheath to function
        on all standard syringes. The Company believes that its licensed design for
        a
        safety syringe will compete successfully with the other safety syringes on
        the
        market. This design can be used on barrels of various sizes.
  Marketing
        of Pharmaceutical Company Drug Samples to Physicians
  PPSI
        patient StarterScript prescription drug program allows the physician to
        provide  to the patient a cost effective means to support medication
        management from both a clinical and economic perspective. The patient sees
        if
        they may tolerate the medication under both the physician and pharmacist
        oversight.
  The
        PPSI
        online network provides better marketing and clinical integration information
        than traditional systems, and enables pharmaceutical companies to maintain
        market share when competing with generic drugs. The PPSI information system
        includes detailed information such as the individual sales representative,
        zip
        codes, DEA number, pharmacy and prescribing physician. The PPSI system provides
        pharmaceutical companies with an easy, safe way to offer free samples through
        physicians and increase their value to patients who benefit through savings
        on
        prescriptions. In addition, the PPSI system provides incentives for chain
        drug
        stores to stock the pharmaceutical products and for pharmaceutical companies
        to
        keep their products on managed care formularies. Pharmaceutical manufacturers
        spend over $16 billion a year for the marketing of products. PPSI's strategy
        is
        to provide flexible sample programs supported by  technology to assist with
        distribution, dispensing, reporting, and clinical  integration that
        maximizes the intent of appropriate sample model for marketing.
  -5-
 Sales,
        Marketing and Distribution
  Univec
        has entered into several agreements with large United States based wholesalers
        for the support and expansion of distribution channels for nationwide delivery
        of the Univec product line.
  Univec
        also markets its StarterScript patient prescription sampling services to 
pharmaceutical companies desiring to maintain or expand market position.
        The
        company management believes that with the growth of third party payments
        of
        prescription drug such as Medicare and managed care companies the direct
        to
        consumer programs will grow. Univec also believes that with more branded
        pharmaceutical products coming off patent will  further enhance direct
        patient sampling or StarterScript programs as an offense to  generic drug
        substitution.
  Univec
        has shipped its lcc AD-Syringes to over 80 countries. Univec intends to market
        its Safety-Shield syringes, as well as the Demolizer medical waste disposal
        system to governments of developing countries, private hospitals and health
        facilities in the United States, and distributors in the United States. Univec
        is a licensee of products and proprietary manufacturing processes relating
        to
        1cc AD-Syringes. For manufacturing in our facilities. The Company
 markets
        such syringes to governments of developing countries, private hospitals and
        medical facilities. To stimulate demand for its safety syringes, Univec plans
        to
        initiate promotional and educational campaigns directed at (i) public health
        officers and other government officials responsible for public health policies,
        (ii) doctors and administrators of healthcare facilities responsible for
        treatment of HIV-AIDS and hepatitis patients, and (iii) liability insurance
        companies.
  Univec
        also markets its drug sampling services to pharmaceutical companies desiring
        to
        maintain or expand market position.
  Production
  Univec's
        lcc locking syringes are being assembled by contract manufacturers in the
        United
        States, China and Portugal. (See Item 1, "Description of Business" and Item
        3
        "Legal Proceedings" for the current status of the Company's business. The
        United
        States manufacturers also mold the Company's proprietary syringe  plungers.
        Univec owns stamping, assembly, and molding equipment at its U.S.  contract
        manufacturer. Univec relocated its clip plunger assembly production facility
        designed to produce 1cc AD-Syringes from Farmingdale, New York to 
Baltimore, Maryland during July 2003. These assemblies are shipped to our
        contract manufacturers to produce Auto-Disable Syringes.
 
  Univec's
        syringes consist of a standard needle, barrel, rubber stopper, a ratcheted
        plunger designed by the Company, and a pronged stainless steel locking clip
        designed by Univec. The locking clip and plunger can be assembled, with minor
        modifications, into barrels manufactured by Becton-Dickinson, Tyco, and other
        syringe manufacturers. Univec has obtained a patent on its stainless steel
        locking clip, and has been granted a patent for the design of a plunger which,
        when combined with the locking clip, results in a narrow-barreled,
        difficult-to-reuse, locking syringe. The stainless steel for the locking
        clip
        and the plastic for the syringe barrels and plungers is readily available
        from
 several
        sources. The syringe barrels for some of the syringes sold by Univec have
        been
        manufactured by a Portuguese contract manufacturer. Univec has been successful
        through other sources worldwide in purchasing barrels to increase the overall
        production capacity. In addition, Univec continues to send clip plunger
        assemblies produced in the U.S. to syringe manufacturers to also increase
        overall production. Univec continues to pursue alternate sources of supply
        for
        components. Should there be a need for a certain component from an alternate
        supplier, there can be no assurance that the Company will be able to obtain
        it
        on acceptable terms, and there can be no assurance that production of certain
        configurations of its lcc locking syringes will not be delayed. Delays resulting
        from the selection of an alternate supplier to produce certain components
        could
        have a materially adverse effect on Univec's business.
  -6-
  Competition
  Univec's
        principal competition for syringes is from traditional disposable syringes.
        Becton-Dickinson, Tyco and Terumo control approximately 90% of the worldwide
        syringe market, and are substantially larger, more established and have
        significantly greater financial, sales and marketing, distribution, engineering,
        research and development and other resources than the Company. To Univec's
        knowledge, only Becton-Dickinson and Bader, a German machine tool manufacturer,
        distribute commercially a line of difficult-to-reuse syringes, none of which
        allow for aspiration. The Bader DestroJect syringe and the Becton-Dickinson
        SOLOSHOT syringe were designed to dispense a dosage of .5cc only, whereas
        the
        UNIVEC 1cc locking clip syringe was designed to dispense dosages up to .95cc.
        Univec believes that UNIVEC syringes are more effective than competitors'
        difficult-to-reuse syringes and that the UNIVEC syringes are competitively
        priced. There can be no assurance that the major syringe manufacturers or
        others
        will not commence production of 1cc difficult to-reuse-syringes, or locking
        syringes which aspirate, or that Univec will be able to successfully compete
        in
        this market.
  PPSI's
        competition comes from traditional sampling providers that include the actual
        drug samples and other pharmaceutical benefit management companies that offer
        similar services such as Caremark and Medco Health.
  Patents,
        Licenses and Proprietary Rights
  In
        1995,
        Univec was granted a United States patent for a locking clip device not biased
        against the plunger. The patent is broad enough to include several applications
        of the design covering the first series of products to be marketed by Univec.
        Univec was granted a United States patent for a plunger design which, in
        conjunction with its patented locking clip, results in a narrow barrel,
        difficult-to-reuse syringe that allows for aspiration during use.
  In
        the
        past, Univec has filed patent applications for its locking clip and aspirating
        plunger in certain foreign countries participating in the Patent Cooperation
        Treaty (Canada, Brazil, Mexico, certain European countries, Japan, South
        Korea,
        China, Russia and Australia). However, patent applications filed in foreign
        countries and patents granted in such countries are subject to laws, rules
        and
        procedures that differ from those in the United States, and accordingly,
        patent
        protection in such countries may be different from patent protection provided
        by
        United States laws. In December 2003, to settle an outstanding note with
        Syrinter, Ltd. (Switzerland), the Company assigned certain patents for the
        1cc
        auto-disabled syringe as in full payment of the note and interest thereon.
        The
        Company in turn received relief from restrictive patent payments and a perpetual
        license to exploit these patents provided manufacturing occurs in the United
        States. In addition, the Company will continue to receive 15% of future
        royalties being earned from the licensing of these items. Univec has registered
        trademarks UNIVEC(R), and Rx Ultra(R), Rx Plus, The Univec Crest and the
        symbol
        representing no second use, (i.e., the number 2 crossed out inside of a circle),
        with the United States Patent and Trademark Office.
  In
        March
        2001, Univec exercised an option to acquire a license of a component for
        a
        period of the later of ten years or the expiration of the last patent relating
        to the component and its improvements, with the right to terminate the agreement
        if the Company fails to produce and ship at least ten million of this component
        within three years. Univec is committed to pay a royalty of $.001, per component
        sold, with an advance royalty fee of $15,000 previously paid. As of December
        31,
        2004, Univec has sold only an insignificant amount subject to royalties under
        this agreement.
  In
        July
        2000, Univec received FDA approval of the sliding sheath syringe and began
        to
        manufacture and market this product in 2001.
  In
        August
        2000, Univec entered into a licensing agreement providing for the non-exclusive,
        worldwide use of Univec patents for the manufacturing, use and marketing
        of its
        auto-disable syringes through the period any patents are still in effect,
        providing for royalties on sales and for the sale of equipment necessary
        to
        manufacture the product. In accordance with this agreement, Univec has earned
        royalties of $30,284 and $109,690 for the years ended December 31, 2004 and
        2003, respectively.
  -7-
 In
        2003
        the Company assigned certain patents to a creditor in payment of an amount
        due
        and also assigned the future royalties under the auto-disable syringe licensing
        agreement. The Company has licensed back the rights under these patents to
        market and manufacture in North America.
  In
        2004
        the Company applied for and received a Provisional Patent from the U.S. 
Patent and Trademark Office on September 21, 2004, the Patent #60/611,670
        and
        Foreign Filing  License Granted October 15,2004, code US60/611,670.
        However, patent applications filed in foreign countries and patents granted
        in
        such countries are subject to laws, rules and procedures that differ from
        those
        in the United States, and accordingly, patent protection in such countries
        may
        be different from patent protection provided by United States laws. In brief
        description, a medical device with  a sliding sheath to protect caregivers
        in the dental and the cosmetic market.
  Government
        Regulation
  The
        manufacture and distribution of medical devices are subject to extensive
        regulation by the FDA in the United States, and in some instances, by foreign
        and state regulatory authorities. Pursuant to the Federal Food, Drug, and
        Cosmetic Act, as amended, and the regulations promulgated there under
        (collectively, the "FDC Act"), the FDA regulates the clinical testing,
        manufacture, labeling, sale, distribution and promotion of medical devices.
        Before a new device can be introduced into the market, a manufacturer must
        obtain FDA permission to market through either the 510(k) pre-market
        notification process or the costlier, lengthier and less certain pre-market
        approval ("PMA") application process. With the 510(k) notification, the Company
        may sell its 1cc locking clip syringe in the United States, subject to
        compliance with other applicable FDA regulatory requirements. As a Class
        II
        device, performance standards may be developed for the 1cc locking clip syringe
        which the product would then be required to meet. Failure to meet standards
        for
        effectiveness and safety could require the Company to discontinue the
        manufacturing and/or marketing of the product in the United States. Furthermore,
        manufacturers of medical devices are subject to record-keeping requirements
        and
        required to report adverse experiences relating to the use of the device.
        Device manufacturers
        are also required to register their establishments and list their devices
        with
        the FDA and with certain state agencies and are subject to periodic
 inspections
        by the FDA and certain state agencies.
  Medical
        devices are subject to strict federal regulations regarding the quality
        of manufacturing ("Good Manufacturing Practices" or "GMP"). GMP regulations
        impose certain procedural and documentation requirements upon the Company
        with respect to manufacturing and quality assurance activities. The FDA conducts
        periodic audits and surveillance of the manufacturing, sterilizing and packaging
        facilities of medical device manufacturers to determine compliance with
        GMP
        requirements. These procedures may include a product recall or a "cease distribution"
        order which would require the manufacturer to direct its distributors
        and sales agents to stop selling products, as well as other enforcement
        sanctions. Univec's manufacturing facilities have not been certified as
        satisfying GMP requirements. Univec's facilities will be subject to extensive audits
        in
        the future, pursuant to standard FDA procedure. No assurance can be given
        that when the Company is audited that it will be found to be in compliance with
        GMP
        requirements, or that if it is not found in compliance, what penalties, enforcement
        procedures or compliance effort will be levied on or required of the Company.
        To date, Univec has not been audited by the FDA. The FDA also has
        the
 authority
        to request repair, replacement or refund of the cost of any device manufactured
        or distributed by the Company, and the failure to meet standards for
        safety and effectiveness could require the Company to discontinue marketing and/or
        manufacturing its product in the United States.
  The
        introduction of Univec's products in foreign markets will also subject Univec
        to
        foreign regulatory clearances which may impose additional substantive costs
        and
        burdens. International sales of medical devices are subject to the regulatory
        requirements of each country. The regulatory review process varies from
        country to country. Many countries also impose product standards, packaging requirements,
        labeling requirements and import restrictions on devices. In addition,
        each country has its own tariff regulations, duties and tax requirements.
        Univec's products are required to satisfy international manufacturing
        standards for sale in certain foreign countries.
  The
        approval by the FDA and foreign government authorities is unpredictable and
        uncertain, and no assurance can be given that the necessary approvals or clearances
        for the Company's products will be granted on a timely basis or at all.
        Delays in receipt of, or a failure to receive, such approvals or clearances,
        or the loss of any previously received approvals or clearances, could
        have a materially adverse effect on the business, financial condition and results
        of operations of the Company. Furthermore, approvals that have been or may
        be
        granted are subject to continual review, and later discovery of previously
        unknown problems may result in product labeling restrictions or withdrawal
        of the product from the market. Moreover, changes in existing requirements
        or adoption of new requirements or policies could adversely affect the
        ability of Univec to comply with regulatory requirements. There can be no assurance
        that Univec will not be required to incur significant costs to comply with
        applicable laws and regulations in the future. Failure to comply with applicable
        laws or regulatory requirements could have a materially adverse effect
        on
        Univec's business, financial position and results of operations.
 -8-
 Research
        and Development
  For
        the
        years ended December 31, 2004 and 2003, Univec expended $28,871 and $28,547,
        respectively, on product development expenses.
  Employees
  As
        of
        July 31, 2005, Univec employed four persons, including two full time in
        sales
        and marketing, one full time in financial administration, and one full time
        in
        production. None of Univec's employees is covered by a collective bargaining
        agreement.
  As
            of
            July 31, 2005, PPSI had no employees, but utilizes outside marketing representatives
            and consultants for marketing and administrative services.
  Univec
        occupies a production facility, warehouse, administrative, and executive
        offices in Baltimore, MD (comprised of approximately 22,000 square feet
        of
        space) pursuant to a lease that expired on July 15, 2004 with ten (10) renewable
        one (1) year option terms which are automatically renewable by Univec. Rental
        expense for the space is $72,000 per annum plus certain common charges, maintenance
        costs and real estate taxes, subject to a maximum increase of 3% for each
        three year term.
  PPSI
            shares office space with a related company, owned by the Chief Executive
            Officer
            of Univec. The expenses of the space, together with other expenses, that
            would
            be allocated to PPSI are insignificant.
 Item
        3.
        Legal Proceedings.
  In
        February 2000, a former consultant commenced an action against the Company
        and its directors, Alleging breach of contract and fiduciary duty, and is
        seeking consulting fees in the amount of: (1) 250,000 shares of common stock, (2)
        $192,000 and (3) costs of this action. The Company and counsel do not believe
        the consulting fees are due and will continue to vigorously defend this action.
  Item
        4.
        Submission of Matters to Vote of Security Holders.
  The
        Annual Meeting of Stockholders of Univec, Inc. for the year ended December
        31, 2003, was held on August 12, 2004, to consider and vote upon a proposal to
        elect
        S. Robert Grass, Dr. David Dalton, John Frank and William Wooldridge as directors,
  The
        number of votes cast for and against each of the foregoing proposals and
        the
        number of
        abstentions are set forth below.
  Proposals
        to Elect Directors:
  **For**
              
              **Withheld**S.
                  Robert Grass
              
              19,641,801
              
              0David
                  Dalton
              
              19,620,601
              
              21,200John
                  Frank
              
              19,620,601
              
              21,200William
                  Wooldridge
              
              19,641,801
              
              0
  -9-
 I tem
        5.
        Market for Common Equity and Related Stockholder Matters.
  (a)(1)
        Prior to July 2, 1999, the Company's Common Stock and redeemable Common
        Stock Purchase Warrants (expired April 2002) traded on the Nasdaq SmallCap Market.
        Following that date, the common stock and warrants have been quoted on the
        OTC
        Bulletin Board under the symbols "UNVC" and "UNVCW", respectively.
  Set
        forth
        below are the high and low closing sale prices for the Common Stock on
        the
        over-the-counter bulletin board from January 1, 2003 through December 31, 2004
        and
        the first quarter of 2005.
  **Common
                  Stock****("UNVC")****Quarter
                  Ended**
              **High**
              
              **Low**March
                  31, 2003
              $
              0.070
              
              $
              0.040June
                  30, 2003
              $
              0.110
              
              $
              0.100September
                  30, 2003
              $
              0.260
              
              $
              0.050December
                  31, 2003
              $
              0.140
              
              $
              0.070March
                  31, 2004
              $
              0.150
              
              $
              0.090June
                  30, 2004
              $
              0.120
              
              $
              0.070September
                  30, 2004
              $
              0.090
              
              $
              0.060December
                  31, 2004
              $
              0.110
              
              $
              0.040March
                  31, 2005
              $
              0.110
              
              $
              0.100
  (1)
        As of
        December 31, 2004, there were 120 holders of record of the Common Stock.
  (2)
        During the fiscal year ended December 31, 2004, Univec sold unregistered
        securities to a limited number of persons in transactions exempt from
        the
        registration requirements of the Securities Act, as described below. Except
        as
        indicated, there were no underwriters involved in the transactions, and
        there
        were no underwriting discounts or commissions paid in connection therewith.
        The purchasers of securities in each such transaction represented their
        intention to acquire the securities for investment only and not with a view
        to
        or for sale in connection with any distribution thereof and appropriate legends
        were affixed to the certificates for the securities issued in such transactions.
        All purchasers of securities in each such transaction had adequate access
        to
        information about Univec, and in the case of transactions exempt from registration
        under Section 4(2) of the Securities Act, were sophisticated
 investors.
  1.
        During
        2004, a Univec officer converted $125,262 of contractual benefits to 1,660,035
        common shares.
  2.
        On
        February 5, 2004, Univec converted 50 shares of Series E Preferred Stock
        to 799,371
        common shares at $.064 per common share.
  3.
        On
        February 15, 2004, two Company officers exchanged 500,000 common shares in
        payment of a total of $50,000 compensation options at $.05 per
        share.
  4.
        On
        July 3, 2004, Univec issued 500,000 shares at $.02 per common share of
        common
        stock to a former director as payment of $10,000 of notes payable.
  5.
        On
        November 12, 2004 Univec issued 6,000,000 shares of common stock to a vendor
        in
        exchange for $240,000 financial consulting services at $.04 per
        share.
  6.
        On
        December 8, 2004, Univec converted 30 shares of Series E Preferred Stock
        to 990,970
        common shares at $.0323per common share.
  -10-
 Item
        6.
        Management's Discussion and Analysis
  The
        following discussion and analysis should be read in conjunction
        with
 Univec,
        Inc's ("Univec", "we" or "our"), consolidated financial statements,
 including
        the notes thereto, appearing elsewhere in this report.
  Condensed
        Consolidated Results of Operations
 **2004**
                  
                  **2003**
                  
                  **Change****(Restated)**Revenues
                  
                  $
                  19,448,388
                  
                  $
                  16,977,822
                  
                  
                  14
                  %
  Cost
                      of Revenues
                  
                  $
                  19,174,494
                  
                  
                  16,986,565
                  
                  
                  13
                  %
  Gross
                      Margin
                  
                  
                  273,894
                  
                  
                  (8,743
                  )
                  
                  (3,233%)Expenses:Marketing
                      and SellingExpense
                  
                  
                  123,400
                  
                  
                  379,738
                  
                  
                  (68
                  %)Product
                      Development
                  
                  
                  28,871
                  
                  
                  28,547
                  
                  
                  1
                  %General
                      andAdministrative
                  
                  
                  1,,847,246
                  
                  
                  847,013
                  
                  
                  118
                  %Interest
                      Expense, Net
                  
                  
                  108,092
                  
                  
                  91,564
                  
                  
                  18
                  %Gain
                      on Extinguishmentof Debt
                  
                  
                  (144,819
                  )
                  
                  (24,872
                  )
                  
                  482
                  %Loss
                      on write-off ofGoodwill
                  
                  
                  1,774,119
                  
                  
                  -
                  
                  
                  -Loss
                      on sale of Subsidiary
                  
                  
                  597,056
                  
                  
                  -
                  
                  
                  -Other
                      Income
                  
                  
                  (47,795
                  )
                  
                  -
                  
                  
                  -Loss
                      on capitalized lease
                  
                  
                  -0-
                  
                  
                  121,366
                  
                  
                  -Total
                      Expenses
                  
                  
                  4,286,170
                  
                  
                  1,443,356
                  
                  
                  197
                  %Discontinued
                      Operations
                  
                  
                  (8,260
                  )
                  
                  (93,502
                  )
                  
                  (91
                  %)Net
                      Loss
                  
                  $
                  (4,020,536
                  )
                  $
                  (1,545,601
                  )
                  
                  (160
                  )%
  Sales
        within PPSI’s GPO comprised more than 99% of the total sales for 2004. A
        breakdown of revenues and cost of revenues for 2004 between the Company and
        its
        wholly-owned subsidiary, PPSI, are as follows:
  **Univec**
              **PPSI**
              **Total**Revenue
              $59,816
              $19,388,572
              $19,448,388Cost
                  of Revenues
              53,933
              19,120,561
              19,174,494Gross
                  Margin
              $
                  5,883
              $
                  268,011
              $
                  273,894
  The
        Company has corrected an error which occurred during the year ended December
        31,
        2003 in
        connection with the capitalized lease of equipment. The underlying fixed
        assets
        were purchased
        by an affiliated company owned by an officer of the company and leased to
        the Company.
        In 2003, the Company originally reported the payoff of the lease from proceeds
        of loans.
  The
            restatement recorded the reinstatement and subsequent write-off of the
            old
            capitalized lease and the capitalization of the new lease, which resulted
            in an
            additional loss of $115,031, which was offset by a reduction of $115,031
            in
            general and administrative expenses less than $0.01, per share.
 The
        Company determined that the goodwill with a carrying value of $1,774,119
        had
        been fully
        impaired and has written-off the entire balance.
  The
        Company has its focus on the marketing, production, development and distribution
        of its pharmaceutical and proprietary products and licensing of the technology
        of its insulin and tuberculin sliding sheath safety syringes.
  Gross
            profit for the year ended December 31, 2004 increased to 1.4% from (0.1%)
            in
            2003. Gross profit based on product sales for 2004 decreased to $273,894
            as
            compared to $(8,743) in 2003. The increased gross profit is primarily
            due to the
            lower gross profit contribution from PPSI’s GPO revenue and also from lower
            sales volume of our 1cc clip syringe. The GPO gross profit was 1.4% and
            (0.1)%
            for the year 2004 and 2003, respectively. During 2003 the Company encountered
            a
            non-recurring $381,949 cost adjustment being paid to a significant GPO
            customer. The reduction of syringe gross profit is largely the result
            of
            decreased sales volume and fixed overhead costs of $7,290. We anticipate
            gross
            profit levels to remain at current levels, unless we increase our market
            penetration, our prices, product mix and/or realize anticipated production
            or
            economic benefits that we anticipate as a result of our relocation to
            Maryland
            from New York during 2003 and recent financings.
 -11-
  As
        a
        result of the acquisitions of PPSI, we have broadened our pharmaceutical
        product
        distribution base. We anticipate increases in sales on a period by period
        basis
        from  PPSI if we can increase our market penetration in these
        areas.
  Marketing
        and selling costs in 2004 decreased $256,338 (68%) from 2003. This decrease
        is due to decreases in shipping costs, rent and compensation costs, as a
        result
        of limited funds available to conduct marketing activities. As a result of
        our
        2004 financing, we anticipate increasing our marketing activities.
  Product
        development expense for 2004 increased by $324 (1.1%) as compared to 2003.
        This
        increase was the result of increased expenditures for patent legal costs
        and
        product testing expense.
  General
            and administrative expenses for the year ended December 31, 2004 increased
            $1,000,233 (118%) as compared to 2003. This increase is due primarily
            to
            increases in professional fees, insurance and relocation costs offset
            in part by
            decreases in compensation, GPO cost adjustments, securities maintenance
            expenses and a $75,000 reserve  provided for inventory valuation. There was
            also an $85,088 provision for equipment located at former suppliers,
            which is no
            longer being used in production activities of the Company.
 Interest
        expense for the year ended December 31, 2004 increased by $16,528 (18%)
        as
        compared to 2003 primarily as a result of increased debt during
        2004.
  Other
        income for the year ended December 31, 2004 includes $36,349 gain on the
        sale of marketable
        securities plus $11,446 gain on the sale of equipment.
  Net
            loss for 2004 increased by $(2,474,935) (160%) primarily due to the $1,774,119
            write-off of goodwill and a loss of $597,056 on the sale of a subsidiary.
            The
            subsidiary was sold during August 2004 in order to reduce fixed costs
            associated
            with its operation. Without considering the loss on the sale of the subsidiary
            and gain on extinguishment of debt ($144,819), the gain on the sale of
            equipment
            and marketable securities of $47,795, the increase in the net loss before
            non-recurring items of $(2,129,860) was primarily related to the $1,000,233
            increase in general and administrative expenses .
 Liquidity
        and Capital Resources
  Liquidity
        and Capital Resources, Page 11 - “Viable Plan” to generate positive
        cash .
  The
        Form
        10-KSB states that the Registrant’s management is currently seeking additional
        investment capital to support its entrance into new business ventures and
        provide the capital needed to operate. Further, in Part I, Item 1 the Registrant
        states that during late 2004 the company was established as a distributor
        of
        specialty and highly regulated pharmaceutical products. The company intends
        to
        expand the product line to take further advantage of its group purchasing
        and
        closed systems purchasing. Additionally, In 2004 the Company applied for
        and
        received a Provisional Patent from the U.S. Patent and Trademark Office on
        September 21, 2004, the Patent #60/611,670 and Foreign Filing License Granted
        October 15, 2004, code US60/611,6700 .... in brief description, a medical device
        with a sliding sheath to protect caregivers in the dental and cosmetic
        markets.
  These
        significant new products are anticipated to provide the company with revenue
        sources and gross profits which will adequately support its continued
        operations. Because of their prior discussion in the Description of the Business
        segment of the Form 10-KSB, any revisions to Note 3 of the financial statements
        would be repetitious in these circumstances.
  The
        working capital deficit of $2,542,657 at December 31, 2003, increased to
        a
        deficit of
        $4,207,570 at December 31, 2004. A significant reason for this increase is
        the
        classification
 of
        $457,377 of formerly long-term debt as current debt due to $79,651 in late
        payments and $377,726 for
        non-compliance with contractual covenants. Further, net increases in accounts
        payable and accrued
        expenses, total loans payable and deferred compensation, partially offset
        by an
        increase in
        accounts receivable also accounted for the decrease in working capital.
  The
        accompanying financial statements have been prepared on a going concern basis,
        which contemplates
        the realization of assets and the satisfaction of liabilities in the normal
        course of business. As
        of
        December 31, 2004, the Company had negative working capital of $4,207,570
        and
        stockholders' deficit
        of $3,717,269 and had previously incurred net losses of $(4,020,536) and
        $(1,646,989) for the years
        ended December 31, 2004 and 2003. The Company is also in default of
        approximately $1,200,000 of
        loan
        and notes payable all of which are payable on demand as a result of such
        defaults. These factors, among
        others, indicate that the Company's continuation as a going concern is dependent
        upon its ability to
        obtain  adequate  financing and/or achieve profitable operations.
        The financial statements do not include
        any adjustments related to the recoverability and classification of recorded
        asset amounts or the amounts
        and classification of liabilities that might be necessary should the Company
        be
        unable to continue
        in existence.
  Management
        is currently seeking additional investment capital to support its entrance
        into new
        business ventures and provide the capital needed to operate.
  Net
        cash
        used in operating activities increased by $ 463,293 (163%)
        to $747,984 for the year
        ended December 31, 2004 from 2003, primarily due to the increased net
        loss.
  Net
        cash
        used in investing activities of $743,145 resulted from the purchases of
        restricted cash deposits,
        fixed assets and cash used in the sale of the subsidiary during 2004.
  Net
            cash
            provided by financing activities increased by $1,299,498 (620%) to
            $1,508.751 for 2004 from $209,253 provided during 2003. This increase
            resulted
            from an increase in aggregate borrowings of $1,244,795 and decrease in
            aggregate
            repayments of borrowings of approximately $27,870. There was also a $50,000
            non-recurring sale of securities during 2004.
 Although
        revenue increased as a result of the 2004 PPSI GPO operations for the entire
        year as we continued
        to market our safety syringes, we suffered from a serious shortage of working
        capital, which
        resulted in the Company’s limited ability to market and sell its
        products.
 -12-
 In
        July
        2004, the Company borrowed an aggregate of $1,000,000 from a city development
        agency, a
        state
        development agency and a stockholder. These proceeds provided us with resources
        to acquire equipment,
        refinance an equipment capital lease and for working capital to enable us
        to
        continue implement
        our business strategy. The proceeds from the above loans and our designation
        as
        a minority
        business enterprise (MBE) should increase our marketing services to
        pharmaceutical companies,
        to increase our sales of safety syringes and develop new products.
 
 As
        a
        result of these actions, Univec’s management anticipates that operations will
        generate a positive
        cash flow during our next fiscal year, but there can be no assurance this
        will
        occur.
  The
        relatively low trading price and volume of our common shares hampers our
        ability
        to raise equity
        capital. There is no assurance that any such equity financing will be available
        to the Company
        or on terms we deem favorable. Management will continue its efforts to obtain
        debt and/or equity
        financing.
  Significant
        Estimates
  In
        conformity with interpretive MD&A guidance provided in Release 33-8350, we
        herein provide details of significant estimates and assumptions involved
        in the
        Company’s application of GAAP.
  In
        accordance with SFAS 142 - Goodwill and Other Intangible Assets the Company
        wrote-off of the entire $1,774,119 balance of impaired goodwill. This judgment
        was provided in accordance with the GAAP provisions used to evaluate the
        future
        value of intangible assets. The Company determined that the excess value
        of
        goodwill paid in the course of the acquisition of its wholly owned subsidiary,
        Physicians and Pharmacy Services, Inc. could no longer be supported by the
        evaluation of potential future profitability of the subsidiary. Management’s
        appraisal of future discounted cash flows and other factors resulted in the
        complete write-off of the wholly impaired asset. Further, the Company applied
        SFAS 5 to determine its provision for losses on litigation. Finally, the
        Company, which was listed as a public company during 2004 on the OTC Bulletin
        Board during 2004, applied SFAS 123 and EITF 96-18 to value equity securities
        which were issued in payment of various corporate obligations.
  New
        Accounting Pronouncements
  Management
        does not believe that any recently issued, but not yet effective accounting
        pronouncements, if adopted, would have a material effect on the accompanying
        financial statements. Financial Accounting Standards Board Statement #
        123R
        Stock Based Compensation is not expected to have a material effect on the Company’s
        financial statements.
  Major
        Customer
  For
        the
        year ended December 31, 2004, our largest customer was a company owned
        by
        our chief executive officer. We intend to reduce our reliance on
        this
        customer through expanding sales to others.
  Forward
        Looking Statements
  Except
        for the historical information contained herein, the matters discussed in
        this
        report are forward-looking statements that involve risks and uncertainties,
        including market acceptance of Univec's products, timely development
        and acceptance of new products, impact of competitive products, development
        of an effective organization, interruptions to production, and other risks
        detailed from time to time in Univec's SEC reports and its Prospectus dated
        April 24, 1997 (as supplemented by the Prospectus Supplement dated
        April
 29,
        1997)
        forming a part of its Registration Statement on Form SB-2 (File No. 333-20187),
        as amended, which was declared effective by the Commission on April 24,
        1997.
  Item
        7.
        Financial Statements.
  The
        financial statements follow Item 13 of this report.
  Item
        8.
        Changes in and Disagreements with Accountants on Accounting and Financial
        Disclosure.
  A
        Form
        8-K was filed on June 13, 2005 and amended by a Form 8-K/A filed on August 1,
        2005,
        reporting the resignation of the Company’s principal registered
        independent
 public
        accounting firm. Further, the Registrant reported that the auditor’s report for the
        previously issued Form 10-KSB for the year ended December 31, 2003 could
        no longer
        be
        relied upon. Also, the former principal registered independent public accounting firm
        has informed the Registrant that it may no longer rely upon review reports
        issued for
 all
        Form
        10-QSB for all quarters starting with the quarter-ended March 31, 2003 through
        the quater -ended
        September 30, 2004.
 -13-
  Item
        8A
        CONTROLS AND PROCEDURES
  (a)
            The “Evaluation Date” of the Company’s disclosure controls and procedures was
            concluded at December 31, 2004 the year-end for this Form 10-KSB annual
            report.
            The “Evaluation Date” evaluation disclosed that the Company's disclosure
            controls and procedures were adequate and effective to ensure that material
            information relating to the Company and its consolidated subsidiaries
            would be
            made known to them by others within those entities, particularly during
            the
            period in which this annual report was being prepared.
  (b)
            Changes in internal controls. There were no significant changes in the
            Company's
            internal controls or in other factors that could significantly affect
            the
            Company's disclosure controls and procedures subsequent to the Evaluation
            Date,
            nor any significant deficiencies or material weaknesses in such disclosure
            controls and procedures requiring corrective actions. As a result, no
            corrective
            actions were taken.
  
 Item
        III
  Item
        9.
        Directors, Executive Officers, Promoters and Control Persons; Compilance
        With
        section 16 (a) of the Exchange Act.
  Directors,
        Executive Officers and Key Employees
  The
        directors, executive officers and key employees of Univec are as
        follows:
  Name
              Age
              PositionDr.
                  David Dalton
              56
              Chief
                  Executive Officer, President and a DirectorS.
                  Robert Grass
              71
              Chairman
                  of the Board of DirectorsWilliam
                  Wooldridge
              60
              DirectorRaphael
                  Langford
              60
              Chief
                  Operating Officer and Executive Vice PresidentMichael
                  Lesisko
              55
              Treasurer,
                  Secretary and Chief Financial
                  Officer
  Dr.
        David
        Dalton assumed the position of President and Chief Executive
 Officer
        of the Company on January 1, 2002, concurrent with the acquisition
        by
 Univec,
        Inc. of Physician and Pharmaceutical Services, Inc. (PPSI), a
        Baltimore
 based
        company founded by Dr. Dalton. Dr. Dalton has over 35 years experience
        in
 the
        healthcare industry, including 18 years with Rite-Aid where he served
        as
 Corporate
        Vice President.
  Dr.
        Dalton founded Health Resources, Inc., in 1983, a pharmacy service
 provider
        having contracts with over 50,000 retail pharmacies for billing and
 payment
        of prescription orders through plan providers. HRI is recognized as
        one
 of
        the
        leading Black Enterprises in the United States. Dr. Dalton also
        founded
 Pharmacy
        Services, Inc., a pharmacy fulfillment center for correctional and
 other
        institutions, with facilities in Maryland, Tennessee and
        Pennsylvania.
  On
        March
        15, 2002 S. Robert Grass was elected a director of Univec. He was
 elected
        Chairman of the Board of Directors in May, 2002. Mr. Grass has been
 associated
        with the pharmaceutical and medical device industry for over
 thirty-two
        years. Mr. Grass developed a chain of pharmacies known as White
 Shield
        Drugstores in Pennsylvania, serving as President, Chief Executive
        Officer
 and
        Chairman of the Board from 1970 to 1996. Mr. Grass also served as
        Chief
 Executive
        Officer and Chairman of the Board of Managed Care RX, a drug
 fulfillment
        and mail order business from 1994 to 1999.
 -14-
 William
        Wooldridge has been a director since August 5, 2003. Mr.
 Wooldridge
        is a recognized and respected entrepreneur. He is the founder of
 MedEcon,
        Inc. one of the largest group purchasing organizations in the
        United
 States.
        Over a twenty-eight year period he has developed a corporation with
 medical
        portfolio sales in excess of $3.5 billion. In 1999, Mr. Wooldridge
        formed
 OrderButton.Net,
        a new web-based transaction processing service that facilitates
 the
        establishment of merchant sites on the internet. Since 2002, Mr.
        Wooldridge
 has
        been
        developing a franchised, non-traditional based photography company.
  Raphael
        Langford has been Chief Operating Officer and Executive Vice-President
 of
        Univec
        Corporation since April 2003. Prior to April 2003, Raphael Langford was
 Vice-President
        of Physician Pharmaceutical Services, Inc. (PPSI) A nationwide PBM with
 Over
        50,000 pharmacies in its network. Mr. Langford managed the design and creation
        of
 products/services
        that serve the PBM market for PPSI, he was responsible for operations
 planning
        and control; material management; total quality management; benchmarking;
        and
 performance
        measurement. Mr. Langford career highlights also include as Executive Director
 of
        the
        National Foundation of Women Legislators. Mr. Langford served as liaison
        to
        Federal
 and
        State
        elected officials. He was responsible for implementing National Policy
        Committees
 for
        Women
        Legislators to set guidelines for Alternative, Holistic & Complementary
        Health.
 Mr.
        Langford co-chaired committees on Alcohol and Substance Abuse and served
        as
        chairman
 for
        Health, Longevity & Long-Term Care Pain Management. He has work on special
        projects
 with
        HHS
        and DEA in Washington, DC. Mr. Langford is a past President & CEO of Olympic
 International,
        Inc. The company specialized in international brokering, manufacturing
        and
 the
        network of raw materials to more than 17 countries. Mr. Langford has over
        thirty-five
 years
        experience in senior management positions with AT&T, Inc., Norton Simon,
        Inc.
 and
        other
        telecommunications and pharmaceuticals entities. He has received credits
        in
 business
        management studies and Industrial psychology at Case Western Reserve University.
  Michael
        Lesisko, a certified public accountant, was named as Chief
 Financial
        Officer of Univec on September 9, 2002. Mr. Lesisko was named
 Treasurer
        and Secretary of Univec on February 11, 2003. From June 1996 to
 September
        2002 Mr. Lesisko was a CPA in public practice. He served as Vice
 President
        of Finance of CarrerCom Corporation and Subsidiaries from November
 1988
        to
        May 1996. Prior thereto, he served as a partner with KPMG Peat
        Marwick
 from
        July
        1982 to August 1988, where he managed financial audits and a
        diverse
 tax
        practice.
  All
        directors hold office until the annual meeting of stockholders of
 the
        Company following their election or until their successors are duly
        elected
 and
        qualified. Officers are appointed by the Board of Directors and serve at
        its
 discretion.
  Meetings
        of the Board of Directors and Information Regarding Committees
  The
        Board
        of Directors has two standing committees, an Audit Committee and
 a
        Compensation Committee. On August 12, 2004, Mr. John Frank and William
        Wooldridge
 were
        elected to the Audit Committee. The duties of the Audit Committee
        include
 recommending
        the engagement of independent auditors, reviewing and considering
 actions
        of management in matters relating to audit functions, reviewing
        with
 independent
        auditors the scope and results of its audit engagement, reviewing
 reports
        from various regulatory authorities, reviewing the system of
        internal
 controls
        and procedures of Univec, and reviewing the effectiveness of
        procedures
 intended
        to prevent violations of law and regulations. The Audit Committee held
        two
 meetings
        in 2004. On August 12, 2004, Mr. S. Robert Grass was elected to the
 Compensation
        Committee. There was one meeting of the Compensation Committee in
        2004.
  The
        Board
        of Directors held four meetings in 2004, which included special
 telephonic
        meetings. All Directors attended at least 75% of the total number
 of
        Board
        meetings and meetings of committees on which they served during the
 period
        they served thereon during 2004.
  Section
        16(a) Beneficial Ownership Reporting
  Section
        16(a) of the Securities Exchange Act of 1934 requires Univec's
        Officers,
 Directors
        and persons who own more than ten percent of a registered class of
 Univec's
        equity securities within specified time periods to file certain
        reports
 of
        ownership and changes in ownership with the Securities and Exchange
 Commission
        (the "Commission"). Officers, Directors and ten percent
        stockholders
 are
        required by regulation to furnish Univec with copies of all Section
        16(a)
 forms
        they file. Based solely on a review of Copies of such reports received
        by
 Univec
        and written representations from such persons concerning the necessity
        to
 file
        such
        reports, Univec is not aware of any failures to file reports or
        report
 transactions
        in a timely manner during the fiscal year ended December 31, 2004.
 -15-
 Item
        10.
        Executive Compensation.
  The
        following table sets forth the compensation awarded to, earned by
        or
 paid
        to
        Univec's Chief Executive Officer and each other executive officers
        of
 the
        Company whose salary and bonus for the two years ended December 31,
        2004
 exceeded
        $100,000.
  Annual
                  Compensation
              Long-Term
                  CompensationOther
                  Annual
              SecuritiesName
                  and Principal Position
              Year
              Salary
              Compensation
              Underlying
                  OptionsDr.
                  David Dalton
              2003
              $
                  360,000(1)
              -
              1,000,000(1)Chief
                  Executive Officer andPresident2004
              $
                  396,000(2)
              -
              -Jonathan
                  Bricken
              2003
              $
                  129,969
              -
              NoneVice
                  President
  (1)
        During 2003, Dr. David Dalton earned a salary of $360,000, plus
        life,
 health
        and disability insurance, as well as an automobile lease and
 insurance
        allowance equal to $24,000 per year. He was granted an option
 to
        purchase 1,000,000 shares of common stock on April 21, 2003.
  (2)
        During 2004, Dr. David Dalton earned a salary of $396,000, plus
        life,
 health
        and disability insurance, as well as an automobile lease and
 insurance
        allowance equal to $24,000 per year.
  Employment
        Agreements
  Dr.
        David
        Dalton provides the amount of time necessary to perform his
 corporate
        duties. Dr Dalton's salary was $396,000 for 2004, plus a bonus
 determined
        by the agreement of Dr. Dalton and the Compensation Committee. On
 each
        January 1, the base salary will be increased by an amount agreed upon
        by
 Dr.
        Dalton and the Compensation Committee. The agreement also provides
        Dr.
 Dalton
        with an option to purchase 2,000,000 shares of Common Stock at an
 exercise
        price of $.24 per share, vesting 500,000 shares on the first
 anniversary
        of the agreement, and an additional 41,667 shares vesting each
        month
 following
        the initial vesting date. The unexpired term of the agreement will
        be
 extended
        automatically by one year on each January 1 following the date of
        the
 agreement,
        such that the unexpired term of the agreement will at all times not
 be
        less
        than two years following each extension. The agreement provides for
 payment
        by Univec of annual premiums on a term life insurance policy with a
        face
 amount
        of
        $2 million. The agreement also provides for health and disability
 benefits,
        as well as an automobile lease and insurance allowance equal to
 $24,000
        per year. Under the terms of the agreement, Dr. Dalton is entitled to
        a
 severance
        payment equal to his highest annual base salary during the term for
 the
        remainder of the term if the agreement is terminated by Dr. Dalton for
        good
 reason,
        or in the event of a change in control of Univec.
  Stock
        Options
  The
        following table contains information concerning the grant of stock
 options
        to Dr. David Dalton ( the "Named Executive Officer") during the
        fiscal
 year
        ended December 31, 2004.
  Number
                  of Shares
              Percent
                  of Total OptionsUnderlying
                  Options
              Granted
                  to Employees in
              Exercise
                  Price
              ExpirationName
              Granted
              Fiscal
                  Year
              Per
                  Share
              DateDr.
                  David Dalton
              -
              0%
              $0.00
              N/A
   -16-
 AGGREGATED
        OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR
        VALUES
  The
        following table summarizes for Dr. Dalton the total number of
 shares
        acquired upon exercise of options during the year ended December
        31,
 2004,
        and
        the value realized (fair market value at the time of exercise less
 exercise
        price), the total number of unexercised options, if any, held at
 December
        31, 2004, and the aggregate dollar value of in-the-money,
        unexercised
 options,
        held at December 31, 2004. The value of the unexercised,
        in-the-money
 options
        at December 31, 2004, is the difference between their exercise or
        base
 price,
        and the fair market value of the underlying Common Stock on December
        31,
 2004.
        The
        closing bid price of the Common Stock on December 31, 2004 was
        $0.11.
   Shares
                  Acquired Upon
              Number
                  of Securities
              In-The-MoneyExercise
                  of Options
              Underlying
                  Unexercised
              Options
                  atDuring
                  Fiscal 2004
              Options
                  at December 31, 2004
              December
                  31, 2004Name
              Number
              Value
                  Realized
              Exercisable
              Unexercisable
              Exercisable
              UnexercisableDr.
                  David Dalton
              None
              None
              2,500,000
              500,000
              $40,000
              $
                  -
  Certain
        Transactions
  At
        December 31, 2004, the following Deferred Payroll was payable to
 executive
        officers and other employees:
   David
                  Dalton, Chief Executive Officer and President
              
              $
              856,000Raphael
                  Langford, Chief Operating Officer
              
              
              127,585Michael
                  Lesisko, Secretary - Treasurer
              
              
              97,3001,080,885Other
                  employees
              
              
              190,603$
              1,271,488
   On
        July
        3, 2003, the Company authorized the issuance of 500,000 shares of
 common
        stock to Richard Mintz, a Director of the Company, at $0.02 per share in
        full
 discharge
        of a $10,000 note payable.
  At
        December 31, 2004, notes payable to companies owned by David
        Dalton,
 President,
        amounted to $578,800. These loans are the result of providing
        working
 capital
        to the Company.
  At
        December 31, 2004, notes payable to David Dalton, President
        amounted
 to
        $100,000 and notes payable to S. Robert Grass, Chairman of the Board
        of
 Directors
        amounted to $153,300. These amounts were advanced to the Company at
 terms
        and
        rates similar to commercial bank provisions. The funds were
        provided
 to
        the
        Company for working capital operating needs.
  On
        February 5, 2004, the Series E preferred stockholder exchanged 50
 preferred
        shares plus $1,170 accrued dividends for 799,371 shares of Common
 Stock
        at
        $0.064 per share On December 8, 2004 this the Series E preferred
 stockholder
        exchanged 30 preferred shares plus $2,008 accrued dividends for
 990,970
        shares of Common Stock at $0.0323 per share
  On
        February 15, 2004, two executive officers exchanged a combined
 $50,000
        of accrued Payroll for 500,000 common shares at $0.10 per share.
        These
 exchanges
        were authorized by the Company's Board of Directors on August 5,
        2003.
  On
        April
        16, 2004, the Company's Chief Executive Officer exchanged
 $108,104
        of employment Contract benefits for 1,403,948 common shares. On August
 31,
        2004,
        the Chief Executive Officer exchanged an additional $17,158 of
 employment
        contract benefits for 256,087 common shares. These exchanges
 were
        authorized by the Company's Board of Directors on August 5,
        2003
 -17-
  Item
        11.
        Security Ownership of Certain Beneficial Owners and Management
  The
        following table sets forth certain information concerning the
 beneficial
        ownership of the Common Stock as of August 31, 2005 by (i) each
 stockholder
        known by the Company to be a beneficial owner of more than five
 percent
        of the outstanding Common Stock, (ii) each director of the Company
        and
 each
        Named Executive Officer and (iii) all directors and officers as a
        group.
    Amount
                  and Nature of Beneficial
              Percentage
                  of common Stock BeneficiallyName
              Ownership
                  (1)
              Owned
                  (2)David
                  Dalton (4)
              23,396,378(5)
              39.40%
                  (6)S.
                  Robert Grass (4)
              1,065,951
                  (9)
              1.87%
                  (10)William
                  Wooldridge (4)
              250,000
                  (13)
              0.44%
                  (14)Raphael
                  Langford (4)
              3,366,667
                  (7)
              5.85%
                  (8)Michael
                  Lesisko (4)
              2,474,001
                  (11)
              4.31%
                  (12)All
                  directors and executiveofficers
                  as a group (5 persons)
              30,552,997
                  (3)(16)
              49.02%
                  (17)Emerald
                  Capital Partners LP
              6,000,000
              10.63%
                  (15)
  (1)
        Unless otherwise indicated, each person has sole investment and
        voting
 power
        with respect to the shares indicated, subject to community property
 laws,
        where applicable. For purposes of computing the percentage of
 outstanding
        shares held by each person or group of persons named above as
 of
        August
        31, 2005 any security which such person or group of persons has
 the
        right
        to acquire within 60 days after such date is deemed to be
 outstanding
        for the purpose of computing the percentage ownership for such
 person
        or
        persons, but is not deemed to be outstanding for the purpose of
 computing
        the percentage ownership of any other person.
  (2)
        Except as otherwise stated, calculated on the basis of 56,464,432 shares
        of
 Common
        Stock issued and outstanding on August 31, 2005.
  (3)
        For
        purposes of this calculation, shares of Common Stock beneficially
        owned
 by
        more
        than one person have only been included once.
  (4)
        Address is c/o the Company, 4810 Seton Drive, Baltimore, Maryland
        21215.
  (5)
        Includes 2,916,674 shares issuable upon exercise of presently
        exercisable
 options.
  (6)
        Calculated on the basis of 59,381,106 shares of Common Stock issued
        and
 outstanding.
  (7)
        Includes 1,133,333 shares issuable upon exercise of presently
        exercisable
 options.
  (8)
        Calculated on the basis of 57,597,765 shares of Common Stock issued
        and
 outstanding.
  (9)
        Includes 312,501 shares issuable upon conversion of Series D
        Preferred
 Stock
        and
        250,000 issuable upon exercise of presently exercisable options.
  (10)
        Calculated on the basis of 57,026,933 shares of Common Stock issued
        and
 outstanding.
  (11)
        Includes 1,000,000 shares issuable upon exercise of presently
        exercisable
 options.
  (12)
        Calculated on the basis of 57,464,432 shares of Common Stock issued
        and
 outstanding.
  (13)
        Includes 250,000 shares issuable upon exercise of presently
        exercisable
 options.
  (14)
        Calculated on the basis of 56,714,432 shares of Common Stock issued
        and
 outstanding.
  (15)
        Calculated on the basis of 56,714,432 shares of Common Stock issued
        and
 outstanding.
  -18-
 (16)
        Includes 5,862,508 shares issuable upon exercise of presently
        exercisable
 options.
  (17)
        Calculated on the basis of 56,464,432 shares of Common Stock issued
        and
 outstanding.
   Item
        12.
        Certain Relationships and Related Transactions
  During
        2003, Univec received a line of credit from Dr. David Dalton,
 President
        and Chief Executive Officer, and S. Robert Grass, Chairman of the
 Board
        of
        prime plus 2%, per annum. This line of credit was issued under the
        same
 terms
        as
        an underlying line of credit which Dr, Dalton and Mr. Grass received
 from
        a
        commercial bank. As of December 31, 2004, the outstanding balance of this
        loan
 was
        $200,000.
  During
        February 2004, Univec borrowed $50,000 from Mr. S. Robert Grass,
 Chairman
        of the Board of Directors, repayable on demand at prime plus 2%,
        per
 annum.
  During
        the years ended December 31, 2004 and 2003, Univec has borrowed an
 aggregate
        of $388,305 from Pharmacy Services, Inc., Health Resources, Inc.
        and
 other
        companies all owned by Dr. David Dalton, President and Chief
        Executive
 Officer.
        These loans are repayable on demand at 10%, per annum. At December
        31,
 2004
        and
        2003, the aggregate balance outstanding was $578,800 and $378,569,
 respectively.
  During
        2004, Pharmacy Services, Inc., a company owned by Dr. David Dalton,
 President
        and Chief Executive Officer, purchased $19,388,572 from PPSI's GPO.
 This
        transaction represented 99% of total revenue.
  PPSI
        shares office space and other administrative expenses with
        affiliated
 companies
        owned by Dr. David Dalton, the Chief Executive Officer of Univec.
 These
        expenses have not been allocated between the companies, but PPSI's
        portion
 would
        be
        insignificant.
  Item
        l3.
        Exhibits and Reports on Form 8-K.
  (a)
        Exhibits
  Exhibit  Description
   2.1(1)
        Stock Purchase Agreement and Plan of Reorganization made and
        entered
 into
        as of December 31, 2001, by and among Physician and Pharmaceutical
 Services,
        Inc. ("PPSI"), the stockholder of PPSI and the Registrant.
  2.2(2)
        Stock Purchase Agreement made and entered into as of February 28,
        2002,
 by
        and among Thermal Waste Technologies, Inc. ("TWT"), the stockholders of
        TWT
 and
        the Registrant.
  3.1(4)
        Restated Certificate of Incorporation of the Registrant, as
        amended.
  3.2(3)
        By-laws of the Registrant, as amended. 4.1(3) Agreement and Plan of
 Merger
        dated as of October 7, 1996 between the Registrant and UNIVEC,
 Inc.,
        a New York corporation.
  4.3(3)
        Form of warrant between the Registrant and the underwriters of the
 Registrant's
        initial public offering.
  4.4(3)
        Specimen Common Stock Certificate.
  4.5(3)
        Specimen Warrant Certificate (included as Exhibit A to Exhibit 4.3
 herein).
  4.6(3)
        Registration Rights Agreement among Registrant and the holders
 of
        bridge warrants.
  4.7(5)
        Certificate of Designation of Series B Preferred Stock. 4.8(6)
 Certificate
        of Amendment of Certificate of Designation of Series B
 Preferred
        Stock.
  4.9(5)
        Form of Warrant Agreement dated July 27, 1998, between Company and
 selling
        security-holder.
  4.10(6)
        Form of Amended and Restated Warrant Agreement, amending and
        restating
 the
        Warrant Agreement dated July 27, 1998, between the Company and the
 selling
        security-holder.
 -19-
 4.11(5)
        Registration Rights Agreement dated July 27, 1998, between the
 Company'
        and selling security-holder.
  4.12(6)
        Registration Rights Agreement, dated February 8, 1999, between the
 Company
        and the selling security-holder.
  4.13(6)
        Certificate of Designation of Series C Preferred Stock. 4.14(6)
        Form
 of
        Warrant Agreement dated February 8, 1999. between the Company
 and
        selling security-holder.
  10.1(3)
        Amended 1996 Stock Option Plan of the Registrant.
  10.2(7)
        1998 Stock Option Plan of the Registrant.
  10.3(8)
        2000 Stock Option Plan of the Registrant.
  10.4(7)
        Employment Agreement dated as of September 4, 1998 between the
 Registrant
        and Joel Schoenfeld.
  10.5(9)
        Patent License Agreement dated August 16, 2000 by and between the
 Company
        and Terumo Europe, NV.
  10.6(9)
        Manufacturing Agreement dated August 16, 2000, by and between the
 Company
        and Terumo, N.V.
  10.7(9)
        Equipment Purchase Agreement dated August 16, 2000, by and between
 the
        Company and Terumo Europe, N.V.
  10.10(9)
        Employment Agreement dated as of January 1, 2002, between the
 Registrant
        and David L. Dalton.
  10.11
        Employment Agreement dated as of December 31, 2001, between the
 Registrant
        and Joel Schoenfeld.
  21.1(3)
        List of Subsidiaries.
  31.1(10)
          Statement of the Chief Executive Officer pursuant to Section
          302 of the Sarbanes-Oxley
          Act of 2002.
  31.2(10)
          Statement of the Chief Financial Officer pursuant to Section 302 of
          the Sarbanes-Oxley
          Act of 2002.
 32.1(10)
          Statement of the Chief Executive Officer
          pursuant to 18 U.S.C. Section 1350,
          as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  32.2(10)
          Statement of the Chief Financial Officer
          pursuant to 18 U.S.C. Section
          1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.
 
 (1)
          Incorporated by reference to the Registrant's Form 8K filed January
 4,
          2002.
 
 (2)
          Incorporated by reference to the Registrant's Form 8K filed March
          11,
 2002.
 
 (3)
          Incorporated by reference from the Registrant's Registration
 Statement
          on
          Form SB-2 (File No. 333-20187) declared effective on
 April
          24,
          1997.
  (4)
          Incorporated by reference from the Registrant's Periodic Quarterly
 Report
          on
          Form 10-QSB for the fiscal quarter ended September 30,
 2000.
 
 (5)
          Incorporated by reference from the Registrant's Registration
 Statement
          on
          Form S-3 (File No. 333-62261) declared effective
 December
          11,
          1999.
 
 (6)
          Incorporated by reference from Amendment No. 2 to the Registrant's
 Registration
          Statement Form 10-S-3 (File 333-74199).
 
 (7)
          Incorporated by reference to the Registrant's Annual Report on Form
 10-KSB
          for
          the year ended December 31, 1998 (File No. 0-22413).
 
 (8)
          Incorporated by reference from the Registrant's Post-Effective
 Amendment
          No
          1 on Form S-2 to Form S-3 (File No. 333-74199) declared
 effective
          on
          January 26, 2001.
 
 (9)
          Incorporated by reference to the Registrant's Annual Report on Form
 10-KSB
          for
          the year ended December 31, 2000 (File No. 0-22413).
 
 (10)
          Filed herewith.
 
 (b)
          Reports on Form 8-K filed during the fourth quarter 2003.
 
 No
          Forms
          8-K were filed during the fourth quarter 2003.
   -20-
  Item
            14.
            Principal Accountant Fees and Services.
 
 The
          following table presents the cost of Univec's principal
          accountants'
 fees
          and
          services for the years ended December 31, 2004 and 2003,
          respectively:
 
 **2004**
                ****
                **2003**Audit
                    fees
                
                $
                110,261
                
                $
                98,794Audit
                    related fees
                
                
                -
                
                
                -Tax
                    fees
                
                
                18,750
                
                
                14,199All
                    other fees
                
                
                -
                
                
                -Total
                
                $
                129,011
                
                $
                112,993
 
 Univec's
          Audit Committee pre-approves the engagement of the principal
 accountant
          and the estimated audit fee, by each category.
 
 SIGNATURES
 
 In
          accordance with Section 13 or 15(d) of the Securities Exchange Act
          of
 1934,
          the
          Registrant caused this report to be signed on its behalf by the
 undersigned,
          thereunto duly authorized.
 
  **UNIVEC,
                        INC.**Date: January
                          11, 2006
                      By:
                      /s/ Dr.
                        David
                        DaltonDr.
                        David DaltonChief
                          Executive Officer
                        (Principal
                          Executive
                          Officer)
 
 In
          accordance with the Securities Exchange Act of 1934, this report
          has
 been
          signed below by the following persons on behalf of the Registrant on
 January
              11, 2006 in the capacities indicated.
 Signatures    Title
  
 /s/
          Dr. David Dalton  Chief
          Executive Officer and
          a Director
 Dr.
          David
          Dalton                            
Principal Executive Officer)
  /s/
          Michael Lesisko             
Chief Financial
          Officer, Treasurer, Secretary
 Michael
          Lesisko
  /s/
          S.
          Robert Grass               
Chairman and a
          Director
 S.
          Robert
          Grass
  /s/
          William Wooldridge       Director
 William
          Wooldridge
 
 
 
 -21-
  
 
 UNIVEC,
          INC. AND SUBSIDIARIES
 CONSOLIDATED
          FINANCIAL STATEMENTS
 DECEMBER
          31, 2004 AND FOR THE TWO YEARS THEN ENDED
 
 Index
          to
          Consolidated Financial Statements
 
 
 
 PageReport
                      of Independent Registered Public Accounting Firm
                  F--2Consolidated
                      Balance Sheet - December 31, 2004
                  F--3Consolidated
                      Statements of Operations - years endedDecember 31, 2004 and 2003
                  F--4Consolidated
                      Statements of Stockholders' Equity - yearsended December 31, 2004 and 2003
                  F--5Consolidated
                      Statements of Cash Flows - years endedDecember 31, 2004 and 2003
                  F--6Notes
                      to Consolidated Financial Statements
                  F--7
                      to F--16
 
 
 
  F-1
 
  The
              Registrant’s auditor has amended their opinion of the 2003 financial statements
              as being “restated”.
  Report
              of
              Independent Registered Public Accounting Firm
 To
              the
              Board of Directors and
 Stockholders
              of Univec, Inc.
  We
                    have
                    audited the accompanying consolidated balance sheet of Univec,
                    Inc. and
                    Subsidiaries as of December 31, 2004 and the related consolidated
                    statements of
                    operations, stockholders' equity and cash flows for each of the
                    years in the
                    two-year periods ended December 31, 2004 and 2003. These consolidated
                    financial
                    statements are the responsibility of the Company's management.
 Our
                    responsibility is to express an opinion on these consolidated
                    financial
                    statements based on our audit.
 We
              conducted our audit in accordance with the standards of the Public
              Company
              Accounting Oversight Board (United States). Those standards require
              that we plan
              and perform the audit to obtain reasonable assurance about whether
              the
              consolidated financial statements are free of material misstatement.
              The company
              is not required to have, nor were we engaged to perform, an audit of
              its
              internal control over financial reporting. Our audit included consideration
              of
              internal control over financial reporting as a basis for designing
              audit
              procedures that are appropriate in the circumstances, but not for the
              purpose of
              expressing an opinion on the effectiveness of the company’s internal control
              over financial reporting. An audit also includes examining, on a test
              basis,
              evidence supporting the amounts and disclosures in the consolidated
              financial
              statements, assessing the accounting principles used and significant
              estimates
              made by management, as well as evaluating the overall consolidated
              financial
              statement presentation. We believe that our audits provide a reasonable
              basis
              for our opinion. We also audited the adjustments described in Note
              2 that were
              applied to restate the 2003 financial statements. In our opinion, such
              adjustments are appropriate and have been properly applied.
 
 In
              our
              opinion, the consolidated financial statements referred to above present
              fairly,
              in all material respects, the consolidated financial position of Univec,
              Inc. as
              of December 31, 2004 and the consolidated results of their operations
              and their
              consolidated cash flows for each of the years in the two-year period
              ended
              December 31, 2004 in conformity with accounting principles generally
              accepted in
              the United States of America.
 
 The
              accompanying consolidated financial statements have been prepared assuming
              that
              the Company will continue as a going concern. As discussed in Note
              3 to the
              consolidated financial statements, the Company has suffered from recurring
              losses from operations, has negative working capital, has a total stockholders’
deficit and is in default on certain debt, all of which raise substantial
              doubt
              about its ability to continue as a going concern. Management’s plans in regard
              to these matters are also discussed in Note 3. The consolidated financial
              statements do not include any adjustments that might result from the
              outcome of
              this uncertainty.
  Abrams,
                      Foster,
                      Nole & Williams, P.ASeptember
                        9,
                        2005
                      Revised
                        November 4, 2005
                    By:
                    /s/ Abrams,
                      Foster, Nole & Williams, P.AAbrams,
                      Foster, Nole & Williams, P.ABaltimore,
                      Maryland
 
 
  F-2
 The
              Company has labeled the appropriate 2003 financial statements as being
              “restated”. Also, the Company has referred to the footnote which describes the
              restatement.
 **Univec,
                      Inc. and Subsidiaries**
                  ******Consolidated
                      Balance Sheet**
                  ******December
                      31, 2004****ASSETS**Cash
                  
                  $
                  29,443Marketable
                      securities
                  
                  
                  36,349Accounts
                      receivable
                  
                  
                  3,123,493Inventories
                  
                  
                  179,878Certificates
                      of deposit - restricted
                  
                  
                  340,407Other
                      current assets
                  
                  
                  46,630Total
                      current assets
                  
                  
                  3,756,200Fixed
                      assets, net
                  
                  
                  622,685Other
                      assets
                  
                  
                  79,468Total
                      assets
                  
                  $
                  4,458,353**LIABILITIES
                      AND STOCKHOLDERS' DEFICIT**Accounts
                      payable and accrued expenses
                  
                  $
                  4,380,826Deferred
                      payroll
                  
                  
                  1,271,488Notes
                      and loans payable - current
                  
                  
                  1,472,163Loans
                      payable - officers/directors
                  
                  
                  260,493Due
                      to affiliated companies
                  
                  
                  578,800Total
                      current liabilities
                  
                  
                  7,963,770Notes
                      and loans payable - long-term
                  
                  
                  211,852Total
                      liabilities
                  
                  
                  8,175,622Commitments
                      and contingencies (Notes 3, 4, 12 and 13)STOCKHOLDERS'
                      DEFICITPreferred
                      stock $.001 par value; 3,743,500 sharesauthorized;
                      none issued and outstandingSeries
                      D 5% cumulative convertible preferred stock,$.001
                      par value; authorized: 1,250,000; issued andoutstanding:
                      125,000 shares (aggregate liquidationvalue:
                      $336,808)
                  
                  
                  125Series
                      E cumulative convertible preferred stock,$.001
                      par value; authorized: 2,000 shares; issued andoutstanding:
                      412 shares (aggregate liquidationvalue:
                      $441,397)
                  
                  
                  1Common
                      stock $.001 par value; authorized: 75,000,000 shares;
                  
                  
                  45,619issued:
                      45,618,852 and outstanding: 45,214,698 sharesAdditional
                      paid-in capital
                  
                  
                  10,977,627Treasury
                      stock, 404,154 shares - at cost
                  
                  
                  (28,291
                  )Stock
                      Subscription Receivable
                  
                  
                  (210,000
                  )Accumulated
                      deficit
                  
                  
                  (14,502,350
                  )Total
                      stockholders' deficit
                  
                  
                  (3,717,269
                  )Total
                      liabilities and stockholders' deficit
                  
                  **$**
                  4,458,353
   F-3
 **Univec,
                              Inc. and Subsidiaries****Consolidated
                              Statement of Operations****Years
                              ended December 31, 2004 and 2003 (Restated)**
 **Year-Ended****Year-Ended****Dec. 31, 2004****Dec. 31, 2003****(Restated)**Revenues$19,448,388$16,977,822Cost of revenues19,249,49416,986,565Gross Margin198,894(8,743)Operating ExpensesMarketing and selling123,400397,738Product development28,87128,547General and administrative1,772,246847,0131,924,5171,255,298Loss from Operations(1,725,623)(1,264,041)Other Income (Expense)Interest expense, net(108,092)(91,564)Gain on extinguishments of debt144,81924,872Loss on write-off of goodwill(1,774,119)-Loss on sale of subsidiary(597,056)-Other income47,795-Loss on write-off of capitalized leaseTotal other expenses(2,286,653)(188,058)Loss from continuing operations(4,012,276)(1,452,099)Loss from discontinued operations(8,260)(93,502)Net loss(4,020,536)(1,545,601)Dividends attributable to preferred stock(35,921)(39,025)Loss attributable to common stockholders$(4,056,457)$(1,584,626)Share informationBasic net loss per common share$(0.11)$(0.05)Basic weighted average numberof common shares outstanding38,510,46733,751,508
 F-4
 **Univec,
              Inc. and Subsidiaries**
 **Consolidated
                Statement of Stockholders' Equity**
 **Years
                    ended December 31, 2004 and 2003
                    (Restated)**
 
 **Series
                        A Preferred**
                    ****
                    **Series
                        B Preferred**
                    ****
                    **Series
                        C Preferred**
                    ****
                    **Series
                        D Preferred**
                    ****
                    **Series
                        E Preferred**
                    ****
                    **Common
                        Stock**
                    ****
                    **Additional****Paid-in**
                    ****
                    **Treasury
                        Stock**
                    ****
                    **Prepaid****Consulting**
                    ****
                    **Accumulated**
                    ****
                    **Total****Stockholders'**
                    ********
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Capital**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Services**
                    ****
                    **Deficit**
                    ****
                    **Equity**Balance,
                        January 1, 2003
                    
                    
                    124
                    
                    $
                    1
                    
                    
                    167
                    
                    $
                    1
                    
                    
                    250
                    
                    $
                    1
                    
                    
                    104,167
                    
                    $
                    104
                    
                    
                    
                    
                    
                    
                    
                    
                    31,772,773
                    
                    $
                    31,773
                    
                    $
                    10,296,627
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    ($8,843,338
                    )
                    $
                    1,485,169Exchange
                        of Series B and Cfor
                        Series E
                    
                    
                    
                    
                    
                    
                    
                    
                    (122
                    )
                    
                    (1
                    )
                    
                    (250
                    )
                    
                    (1
                    )
                    
                    
                    
                    
                    
                    
                    
                    522
                    
                    $
                    1
                    
                    
                    
                    
                    
                    
                    
                    
                    89,708
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (89,707
                    )Common
                        stock
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    .issued
                        for Cash
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    500,000
                    
                    
                    500
                    
                    
                    19,500
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    20,000Consulting
                        fees
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    100,000
                    
                    
                    100
                    
                    
                    9,900
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    10,000Loans
                        payable - officers/directors
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    444,805
                    
                    
                    444
                    
                    
                    49,556
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    50,000Adjustment
                        to conversion of series A andoptions
                    
                    
                    (124
                    )
                    
                    (1
                    )Convert
                        Series B
                    
                    
                    
                    
                    
                    
                    
                    
                    (45
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,843,322
                    
                    
                    1,841
                    
                    
                    (1,843
                    )Convert
                        Series E
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (30
                    )
                    
                    
                    
                    
                    340,909
                    
                    
                    341
                    
                    
                    (341
                    )Exercise
                        of options by officer
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    166,667
                    
                    
                    167
                    
                    
                    6,500
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    6,667Options
                        issued
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    36,400
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    36,400Net
                        loss
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (1,545,601
                    )
                    
                    (1,545,601
                    )Balance,
                        December 31, 2003
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    104,167
                    
                    
                    104
                    
                    
                    492
                    
                    
                    1
                    
                    
                    35,168,476
                    
                    
                    35,169
                    
                    
                    10,506,007
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (10,478,646
                    )
                    
                    62,635Sale
                        of Series D
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    20,833
                    
                    
                    21
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    49,979
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    50,000Common
                        stock issued forCashConsulting
                        fees
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    6,000,000
                    
                    
                    6,000
                    
                    
                    234,000
                    
                    
                    
                    
                    
                    
                    
                    
                    ($240,000
                    )Deferred
                        payroll and accruedexpenses
                        - officers
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    2,160,035
                    
                    
                    2,160
                    
                    
                    173,102
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    175,262Loans
                        payable - officers/directors
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    500,000
                    
                    
                    500
                    
                    
                    9,500
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    10,000Sale
                        of subsidiary
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    2,829
                    
                    
                    404,154
                    
                    
                    ($28,291
                    )
                    
                    
                    
                    
                    
                    
                    
                    (25,462
                    )Convert
                        Series E and dividends
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (80
                    )
                    
                    
                    
                    
                    1,790,341
                    
                    
                    1,790
                    
                    
                    (1,790
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (3,168
                    )
                    
                    (3,168
                    )Amortization
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    30,000
                    
                    
                    
                    
                    
                    30,000Options
                        issued
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    4,000
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    4,000Net
                        loss
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (4,020,536
                    )
                    
                    (4,020,536
                    )Balance,
                        December 31, 2004
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    125,000
                    
                    $
                    125
                    
                    
                    412
                    
                    $
                    1
                    
                    
                    45,618,852
                    
                    $
                    45,619
                    
                    $
                    10,977,627
                    
                    
                    404,154
                    
                    
                    ($28,291
                    )
                    
                    ($210,000
                    )
                    
                    ($14,502,350
                    )
                    
                    ($3,717,269
                    )
 
 
 
 See
                notes
                to consolidated financial statements.
  F-5
 
 **Univec,
                      Inc. and Subsidiaries**
                  ******Consolidated
                      Statement of Cash Flows**
                  ******Years
                      ended December 31, 2004 and 2003 (Restated)**
                  ****
  ****
                    ****
                    **2004**
                    ****
                    **2003**
                      **(Restated)**Cash
                        flows from operating activitiesNet
                        loss
                    
                    $
                    (4,020,536
                    )
                    $
                    (1,545,601
                    )Adjustments
                        to reconcile net loss to net cashused in operating activitiesLoss on write-off of goodwill
                    
                    
                    1,774,119Loss on sale of subsidiary
                    
                    
                    481,719Depreciation and amortization
                    
                    
                    189,008
                    
                    
                    165,511Write-off of equipment
                    
                    
                    57,295Valuation allowance for inventories
                    
                    
                    75,000
                    
                    
                    45,000Stock based compensation
                    
                    
                    4,000
                    
                    
                    36,400Loss (gain) on cancellation of capital lease
                    
                    
                    (2,894
                    )
                    
                    121,366Gain on extinguishment of debt
                    
                    
                    (98,547
                    )
                    
                    (24,872
                    )Gain on receipt of marketable securities
                    
                    
                    (36,349
                    )Other
                    
                    
                    (11,435
                    )Changes
                        in assets and liabilities, net ofeffects from sale of TWTAccounts receivable
                    
                    
                    (506,983
                    )
                    
                    (2,293,183
                    )Inventories
                    
                    
                    17,698
                    
                    
                    128,413Other current assets and other assets
                    
                    
                    (3,320
                    )
                    
                    7,727Accounts payable and accrued expenses
                    
                    
                    713,610
                    
                    
                    2,547,614Deferred payroll
                    
                    
                    619,631
                    
                    
                    536,934Escrow deposits
                    
                    
                    
                    
                    
                    (10,000
                    )Net cash used in operating activities
                    
                    
                    (747,984
                    )
                    
                    (284,691
                    )Cash
                        flows from investing activitiesPurchases of fixed assets (net of capitalizedlease obligation of $250,000 in 2003)
                    
                    
                    (397,068
                    )
                    
                    (1
                    )Increase in restricted cash
                    
                    
                    (340,407
                    )Cash used in sale of subsidiary (net of notes andother payables of $103,600)
                    
                    
                    (5,670
                    )Net cash used in investing activities
                    
                    
                    (743,145
                    )
                    
                    (1
                    )Cash
                        flows from financing activitiesProceeds from notes and loans payable,net of expenses of $80,146 in 2004
                    
                    
                    1,104,343
                    
                    
                    178,453Increase in due from affiliated companies
                    
                    
                    567,194
                    
                    
                    71,870Increase in loans payable - officers/directors
                    
                    
                    54,000
                    
                    
                    230,419Proceeds from sale of stock
                    
                    
                    50,000
                    
                    
                    20,000Payments on notes and loans payable
                    
                    
                    (242,386
                    )
                    
                    (229,363
                    )Payments of capitalized lease obligations
                    
                    
                    (21,232
                    )
                    
                    (62,125
                    )Dividends converted to preferred stock
                    
                    
                    (3,168
                    )Net cash provided by financing activities
                    
                    
                    1,508,751
                    
                    
                    209,253Net increase (decrease) in cash
                    
                    
                    17,622
                    
                    
                    (75,439
                    )Cash,
                        beginning of period
                    
                    
                    11,821
                    
                    
                    87,260Cash,
                        end of period
                    
                    $
                    29,443
                    
                    $
                    11,821Supplemental
                        disclosure of cash flow informationCash paid for interest
                    
                    $
                    48,709
                    
                    $
                    102,961Supplemental
                        disclosures of noncash activityCommon stock issued in payment ofloans payable - officers/directors
                    
                    $
                    10,000
                    
                    $
                    20,000Common stock and options issued in payment
                    
                    $
                    179,262of deferred payroll and accrued expensesConversions of Series E to common stock,including dividends
                    
                    $
                    3,168
                    
                    $
                    89,807Treasury stock received, net of options issued,on sale of subsidiary
                    
                    $
                    (125,462
                    )
   F-6
 
 Univec,
          Inc. and Subsidiaries
 
 Notes
          to
          Consolidated Financial Statements
 
 1.
          Nature
          of Operations
 
 Univec,
          Inc. (Company) produces, licenses and markets medical products, primarily
          syringes,
 on
          a
          global basis. Physician and Pharmaceutical Services, Inc. (PPSI), a subsidiary,
          provides
 pharmaceutical
          sample and group purchasing services of pharmaceutical products. Thermal
          Waste
 Technologies,
          Inc. (TWT), a subsidiary until its sale, marketed a medical waste disposal
          unit.
 
 2.
            Restatement
 The
                      Company has corrected a $121,366 error on the loss on write-off
                      of a capital
                      lease and less $11,958 related depreciation expense and $5,623
                      increased related
                      interest expense restatement which occurred during the year
                      ended December 31,
                      2003 in connection with the correction of a prior error in
                      reporting capitalized
                      lease of equipment. The underlying fixed assets were purchased
                      by a related
                      company owned by an officer of the Company and leased to the
                      Company. In 2003,
                      the Company originally incorrectly reported the payoff of the
                      lease from
                      proceeds of loans. This
                      restatement recorded the reinstatement and subsequent write-off
                      of the old
                      capitalized lease and the capitalization of the new lease,
                      which resulted in an
                      additional prior period net loss of $115,031, less than $0.01,
                      per share.
 
 The
                      new lease was for a term of three years and provided for monthly
                      rent of $3,944
                      and a purchase option of $100,000 at the end of the lease term.
 
 The
                      Company has corrected the reporting of this capitalized the
                      lease. The
                      capitalized lease obligation and related assets have been recorded
                      at the lower
                      of the present value of the minimum lease obligations or the
                      fair value of the
                      minimum lease obligations or the fair value of the related
                      assets of $250,000.
 
 In
                      July 2004, the Company purchased the equipment under the lease
                      for $250,000,
                      effectively canceling the lease.
 
 The
                      Company restated its 2003 sales and related cost of revenues
                      by a net $12,439
                      increase in gross margin to reflect the overall effect of an
                      incorrect 2003
                      year-end sales cutoff.
 
 The
                      general and administrative expenses for 2003 have been reduced
                      by $101,388 to
                      properly report only costs actually incurred as 2003 expenditures.
                      Certain
                      previously reported fee expenses were established to be subsequent
                      period
                      costs.
  The
                      Company incurred $75,000 and $50,000 for the years 2004 and
                      2003, respectively,
                      as a result of inventory write-downs, which have been reclassified
                      to be
                      reported as components of cost of revenues.  Also, 2003 GPO cost
                      adjustments of  $381,949.00 have been reclassified to be reported as a
                      reduction of revenue.
  Year-end
                            December 31, 2003 (net loss) as originally reported
                        
                        $
                        (1,545,601
                        )Increase
                            in gross margin
                        
                        
                        12,439Increase
                            in net interest expense
                        
                        
                        (5,623
                        )Decrease
                            in depreciation expense
                        
                        
                        11,958Loss
                            on write-off of capital lease
                        
                        
                        (121,366
                        )General
                            and Administrative expense adjustment
                        
                        
                        101,388Miscellaneous
                            adjustments
                        
                        
                        _1,204Year-end
                            December 31, 2003 (net loss) as restated
                        
                        $
                        (1,545,601
                        )
   **Univec,
                            Inc and Subsidiaries****Consolidated
                            Statement of Operations****(Restated)****Year
                            ended December 31, 2003****Year-Ended**
                        
                        
                        
                        **Year-Ended****Dec.
                            31, 2003**
                        
                        
                        
                        **Dec.
                            31, 2003****(Originally****reported)**
                        
                        **Restatements**
                        
                        **(****Restated****)**Revenues
                        
                        $
                        16,133,652
                        
                        $
                        844,170
                        
                        $
                        16,977,822Cost
                            of revenues
                        
                        
                        15,722,885
                        
                        
                        1,263,680
                        
                        
                        16,986,565Gross
                            Margin
                        
                        
                        410,767
                        
                        
                        (419,510
                        )
                        
                        (8,743
                        )Operating
                            ExpensesMarketing
                            and selling
                        
                        
                        387,769
                        
                        
                        (8,031
                        )
                        
                        379,738Product
                            development
                        
                        
                        28,617
                        
                        
                        (70
                        )
                        
                        28,547General
                            and administrative
                        
                        
                        1,478,913
                        
                        
                        (631,900
                        )
                        
                        847,0131,895,299
                        
                        
                        (640,001
                        )
                        
                        1,255,298Loss
                            from Operations
                        
                        
                        (1,484,532
                        )
                        
                        220,491
                        
                        
                        (1,264,041
                        )Other
                            Income (Expense)Interest
                            expense, net
                        
                        
                        (85,941
                        )
                        
                        (5,623
                        )
                        
                        (91,564
                        )Gain
                            on extinguishments of debt
                        
                        
                        24,872
                        
                        
                        
                        
                        
                        24,872Loss
                            on write-off of goodwill
                        
                        
                        -
                        
                        
                        
                        
                        
                        -Loss
                            on sale of subsidiary
                        
                        
                        -
                        
                        
                        
                        
                        
                        -Other
                            income
                        
                        
                        -
                        
                        
                        
                        
                        
                        -Loss
                            on write-off of capitalized lease
                        
                        
                        
                        
                        
                        (121,366
                        )
                        
                        (121,366
                        )Total
                            other expenses
                        
                        
                        (61,069
                        )
                        
                        (126,989
                        )
                        
                        (188,058
                        )Loss
                            from continuing operations
                        
                        
                        (1,545,601
                        )
                        
                        93,502
                        
                        
                        (1,452,099
                        )Loss
                            from discontinued operations
                        
                        
                        -
                        
                        
                        (93,502
                        )
                        
                        (93,502
                        )Net
                            loss
                        
                        
                        (1,545,601
                        )
                        
                        -
                        
                        
                        (1,545,601
                        )Dividends
                            attributable to preferred stock
                        
                        
                        (39,025
                        )
                        
                        -
                        
                        
                        (39,025
                        )Loss
                            attributable to common stockholders
                        
                        $
                        (1,584,626
                        )
                        $
                        -
                        
                        $
                        (1,584,626
                        )Share
                            informationBasic
                            net loss per common share
                        
                        $
                        (0.05
                        )
                        $
                        -
                        
                        $
                        (0.05
                        )Basic
                            weighted average numberof
                            common shares outstanding
                        
                        
                        33,751,508
                        
                        
                        -
                        
                        
                        33,751,508
 3.
          Going
          Concern
 
 The
          accompanying financial statements have been prepared on a going concern
          basis,
          which
 contemplates
          the realization of assets and the satisfaction of liabilities in the normal
          course of
 business.
          As of December 31, 2004, the Company had negative working capital of $4,207,570
 and
          stockholders' deficit of $3,717,269 and had previously incurred net losses
          of
          $(4,020,536)
 and
          $(1,646,989) for the years ended December 31, 2004 and 2003. The Company
          is also
          in
 default
          of approximately $1,200,000, of loans and notes payable all of which are
          payable
          on
 demand
          as
          a result of such defaults.
          These factors, among others, indicate that the Company's
 continuation
          as a going concern
          is dependent upon its ability to obtain adequate financing
 and/or
          achieve profitable operations.
          The financial statements do not include any adjustments
 related
          to the recoverability and
          classification of recorded asset amounts or the amounts and
 classification
          of liabilities that might
          be
          necessary should the Company be unable to continue
 in
          existence.
 
 Management
          is currently seeking additional investment capital to support its entrance
          into
 new
          business ventures and provide the capital needed to operate.
 
 4.
          Significant Accounting Policies
 
 Basis
          of
          Presentation
 
 The
          consolidated financial statements include all the accounts of the
          Company
 and
          its
          wholly-owned subsidiaries, Physician and Pharmaceutical Services, Inc.
 (PPSI),
          Thermal Waste Technologies, Inc. (TWT), until its sale and Rx Ultra, Inc.
          (inactive). All
 material
          inter-company balances and transactions have been eliminated. The consolidated
          financial
 statements
          include all the accounts of Thermal Waste Technologies, Inc. until its
          sale
 
 Accounts
          Receivable
 
 Accounts
          receivable consisted of receivables from customers. The Company
 records
          a
          provision for doubtful receivables, if necessary, to allow for any
 amounts
          which may be unrecoverable and is based upon an analysis of the
 Company's
          prior collection experience, customer creditworthiness, and current
 economic
          trends. As of December 31, 2004, no allowance was necessary.
 
 Inventories
 
 Inventories
          are valued at the lower of cost, determined by the first-in,
 first-out
          method, or market.
 
  F-7
  
 Fixed
          Assets
 
 Fixed
          assets are stated at cost, less accumulated depreciation, and are
 depreciated
          on a straight-line basis over the estimated useful lives of seven
          years.
 Maintenance
          and repairs are charged to expense as incurred; renewals and
          improvements
 which
          extend the life of assets are capitalized. Upon retirement or disposal,
 the
          asset
          cost and related accumulated depreciation and amortization are
          eliminated
 from
          the
          respective accounts and the resulting gain or loss, if any, is included
          in
 the
          results of operations.
 
 The
          carrying value of fixed assets is evaluated whenever changes in
 circumstances
          indicate the carrying amount of such assets may not be
 recoverable.
          If necessary, the Company recognizes an impairment loss for the
 difference
          between the carrying amount of the assets and their estimated fair
 value.
          Fair value is based on current and anticipated future undiscounted cash
          flows.
 
 Shipping
          Income and Expense
 
 Shipping
          income is included in product sales. Shipping expenses are included
 in
          marketing and selling.
  Product
          Development
 
 Research
          and development costs have been expensed as incurred.
 
 Basic
          Loss per Share
 
 Basic
          net
          loss per common share was computed based on the weighted average
 number
          of
          common shares outstanding during the year. Dilutive net loss per
          share
 has
          not
          been presented as they are anti-dilutive.
 
 Revenue
          Recognition
 
 Product
          sales are recognized when products are shipped. Although the
          Company
 warrants
          its products, it is unable to estimate the future costs relating to
 warranty
          expense and, as such, recognizes warranty expenses as incurred.
          Revenues
 for
          PPSI's group purchasing service are recognized when the products are
          shipped.
 
 Stock
          Based Compensation
 
 Compensation
          cost for stock, stock options, warrants, etc., issued to
 employees
          and non-employees is based on the fair value method.
 
 Income
          Taxes
 
 Deferred
          income taxes have been provided for temporary differences between
          financial
 statement
          and income tax reporting under the liability method , using expected tax
          rates
          and laws
 that
          are
          expected to be in effect when the differences are expected to reverse.
          A
          valuation
 allowance
          is provided when it is more likely than not , that the deferred tax assets
          will
          not be
 realized.
 
 Estimates
 
 The
          preparation of financial statements in conformity with generally
 accepted
          accounting principles requires management to make estimates and
 assumptions
          that affect the reported amounts of assets and liabilities and
 disclosure
          of contingent assets and liabilities at the date of the financial
 statements
          and the reported amounts of revenues and expenses during the
 reporting
          period. Actual results could differ from those estimates.
 
 Fair
          Values
 
 The
          carrying amounts of cash, accounts receivable, accounts payable and
 accrued
          expenses, notes and loans payable and deferred payroll approximate
          their
 fair
          values.
 
 
 
 F-8
 
 New
          Accounting Pronouncements
 
 Financial
          Accounting Standards Board Statement # 123R, Stock Based
          Compensation,
 effective
          for the year ended December 31, 2006, has not been analyzed to determine
          if it
          will
 have
          a
          material effect on the Company’s financial statements.
 
 Management
          does not believe that any other recently issued, but not yet
          effective
 accounting
          pronouncements, if adopted, would have a material effect on the
 accompanying
          financial statements.
 
 5.
          Marketable Securities
 
 As
            of
            December 31, 2004, marketable securities consisted of an investment in
            an equity security,
 with
            a
            fair market value of $36,349. Management has classified the investment
            as
            available-for-sale.
 The
            Company received this security in December 2004 upon the conversion from
            a
            mutual to a
 stock
            insurance company in which Univec had owned a policy.
 
 In
            January 2005, the security was sold for $36,101.
  6.
          Inventories
 
 Inventories
          consisted of the following:
   Raw
                    materials
                
                $
                152,252Work-in-process
                
                
                89,740Finished
                    goods
                
                
                62,886304,878Less:
                    allowance for valuation
                
                
                (125,000
                )$
                179,878
 
 The
          Company provided a $75,000 and $50,000 valuation allowance in 2004
 and
          2003,
          respectively.
 
 7.
          Fixed
          Assets
 
 Fixed
          assets consisted of the following:
   Equipment
                
                $
                1,100,784Less:
                    accumulated depreciation
                
                
                478,099$
                622,685
 
 
 As
          of
          December 31, 2004, the Company wrote-off fixed assets located at former
          suppliers
 with
          a
          cost of $371,764 and a net book value of $85,088.
 
 Depreciation
          expense was $128,901 and $174,541 in 2004 and 2003, respectively. For the
          year
 ended
          December 31, 2004, fully depreciated assets were approximately
          $43,000.
  F-9
 
 8.
          Notes
          and Loans Payable
 
 As
          of
          December 31, 2004, notes and loans payable consisted of:
   Loan
                        due to a shareholder through July, 2009,with
                        interest at 4% (1) (3)
                    
                    $
                    500,000Loans
                        payable to agencies for economicdevelopment payable at $9,230 per month untilJuly 2009, with interest at 4% per annum (1) (3)
                    
                    
                    470,208Loan
                        payable to a vendor without specificpayment terms or interest (2)
                    
                    
                    211,852Loan
                        payable to a vendor without, specific interest (3)
                    
                    
                    135,000Loan
                        payable to a vendor due April 30, 2007with interest at prime plus 2% per annum (3)
                    
                    
                    105,516Notes
                        payable on August 14, 2005, with interest at 8%
                    
                    
                    85,000Note
                        payable on to a former officer upon sale ofsubsidiary due June 2005, without specific interest
                    
                    
                    60,000Notes
                        payable on June 2005, with interest at 12%,per annum
                    
                    
                    55,000Notes
                        payable to a shareholder's trusts, with interestat 12%, per annum (2)
                    
                    
                    27,000Other
                    
                    
                    34,4381,684,014Less:
                        Current portion of notes and loans payable
                    
                    
                    1,472,162$
                    211,852
   (1)
          On
          July 23, 2004, the Company borrowed an aggregate of $500,000 from the City
          of
 Baltimore
          Development Corporation and the Maryland Department of Business and
          Economic
 Development
          payable in aggregate equal monthly installments of $9,230 over five
          years,
 with
          interest at 4%, per annum. Proceeds are to be used to purchase equipment
          of
 $450,000,
          which together with certain other equipment of the Company, collateralize
 the
          borrowings. The borrowings also required deposits of $335,000 and an irrevocable
 standby
          letter of credit of $200,000. Loans from certain officers and directors
          of
 approximately
          $180,000 have been subordinated.
  As
          required under the borrowings, the Company has obtained a revolving line
          of
          credit
 of
          $500,000 from a stockholder of the Company under which the Company may
          borrow
          for
 working
          capital through July 22, 2009. Loans under the line bear interest at the
          prime
 rate,
          plus 2%, per annum, and may be converted into common stock at $.065, per
          share,
          as
 defined.
          If the line of credit is terminated within one year, there is a penalty
          of up
          to
 90
          days
          of interest. The Maryland Department of Business and Economic Development
          has
 guaranteed
          80% of the loan and interest thereon. In July 2004, the Company borrowed
          $500,000
 under
          the
          line of credit. As of December 31, 2004, interest rate was 7%, per annum.
  Financing
          expenses in connection with these borrowings were $80,146 and will be
          amortized
 over
          the
          term of the borrowings.
  (2)
          Subject to forgiveness upon the vendor's sale of shares of the
          Company’s
 common
          stock.
  (3)
          In
          default due to either noncompliance or late payments. As a result of
          these
 defaults,
          the Company has reclassified long-term debt of $457,376 to current.
 
 9.
          Due to
          Affiliated Companies
 
 Due
          to
          affiliated companies, owned by the chief executive officer of
 the
          Company, on demand, with interest at 10%, per annum.
 
 10.
          Loans
          Payable - Officer/Directors
 
 As
          of
          December 31, 2004, loans payable - officer / directors consisted
          of:
 
 Note
                    payable to the chief executive officerand
                    the chairman of the board of theCompany,
                    due on demand, with interestat
                    prime, plus 2%, per annum (1)
                
                $
                200,000Note
                    payable to a director
                
                
                53,300Others
                
                
                7,193$
                260,493
 
  F-10
 
 
 
 (1)
          The
          same terms as an underlying borrowing from a bank and collateralized
          by
 certain
          equipment. As of December 31, 2004 the interest rate was 7%, per
          annum.
 
 11.
          Income Taxes
 The
          Company files consolidated income tax returns with its
          subsidiaries.
 Prior
          to
          its acquisition, PPSI was a Subchapter S Corporation.
 
 As
          of
          December 31, 2004, the Company had net operating loss carry
          forwards
 of
          approximately $15,250,000 available to reduce future taxable income
          expiring
 through
          2024, which may be limited due to ownership changes.
 
 For
          the
          years ended December 31, 2004 and 2003, the Company's deferred tax
 benefits
          (expenses) were as follows:
 
 **2004**
                    
                    **2003**Net
                        operating loss carry forwards
                    
                    $
                    615,000
                    
                    $
                    200,000Depreciation
                    
                    
                    191,000
                    
                    
                    184,000Goodwill
                    
                    
                    (19,000
                    )
                    
                    (59,000
                    )Compensation
                    
                    
                    132,000
                    
                    
                    200,000Inventory
                        and equipment valuationallowances
                    
                    
                    60,000Valuation
                        allowance
                    
                    
                    (979,000
                    )
                    
                    (525,000
                    )None
                    
                    
                    None
 As
          of
          December 31, 2004, the tax effects of the components of deferred
          tax
 assets
          and liabilities were as follows:
 
 Deferred
                    tax assetsNet
                    operating loss carry forwards
                
                $
                5,352,000Compensation
                
                
                482,000Depreciation
                
                
                183,000Total
                    deferred tax asset
                
                
                6,017,000Deferred
                    tax liabilitiesGoodwill
                
                
                (120,000
                )Net
                    deferred tax asset
                
                
                5,897,000Valuation
                    allowance
                
                
                (5,897,000
                )None
 
 As
          of
          December 31, 2004, realization of the Company's net deferred tax
          asset
 of
          approximately $5,425,000 was not considered more likely than not
          and,
 accordingly,
          a valuation allowance of $5,425,000 was provided.
 
 The
          following is a reconciliation of expected income tax benefit
          utilizing
 the
          Federal statutory tax rate to income tax benefit reported on the
          statement
 of
          operations.
 
 **2004**
                ****
                **2003**Expected
                    income tax benefit
                
                $
                (437,000
                )
                $
                (303,000
                )Change
                    in valuation allowance arising in current year
                
                
                1,164,000
                
                
                504,000State
                    income tax benefit, net of federal income tax effect
                
                
                (107,000
                )
                
                (75,000
                )Other
                
                
                (620,000
                )
                
                (126,000
                )None
                
                
                None
 
 
  F-11
 
 
 
 12.
          Commitments and Contingency
 
 Lease
 
 The
          Company is committed under a non-cancelable lease for production,
 storage
          and office space through July 2005. The lease provides for minimum
 annual
          rent of $72,000, additional rents for the Company's share of normal
 maintenance
          plus its pro-rata share of real estate taxes and eight one year
 renewals
          at the Company's option.
 
 For
          2004
          and 2003, total rent expense was $73,200 and $77,439, respectively.
 
 Employment
          Agreement
 
 The
          Company is committed under an employment agreement to the chief
 executive
          officer, through January 2005, requiring annual compensation
 to
          be
          determined annually by the officer and Company. Annually, the
          agreement
 shall
          automatically renew for one year, resulting in a new three year term
          each
 January
          1. For the years ended December 31, 2004 and 2003, the compensation
          was
 $396,000
          and $360,000, respectively, which have been deferred by the chief executive
 officer.
          The agreement also provides for bonuses, as determined by the officer and
 the
          Company, an automobile allowance (of $24,000, per annum, for 2004) and
          life,
 disability
          and health insurance. In addition, the officer was granted options to
 purchase
          2,000,000 shares of common stock exercisable at $.24, per share,
          through
 2012.
          The
          options vest 25% on January 1, 2003 and 41,667 during each subsequent
          month.
 
 13.
          Litigation Reserve
 
 In
          December 2003, the Company assigned certain of their patents,
          earned
 royalties
          of $72,125 and 85% of all future royalties being earned from these
 patents
          in payment of a note payable and interest thereon for an aggregate
          of
 $99,434,
          in settlement to a collection matter. The Company recognized a
          $24,872
 gain
          upon
          extinguishment of the debt. The Company in turn received relief
          from
 the
          restrictive patent payments and a perpetual license to exploit, market
          and
 manufacture
          these patents in North America. As the value of the license
          received
 could
          not
          be determined, no value was assigned to them.
 
 In
          March
          2004, the Company settled a collection matter with a former
 consultant
          in the amount of $165,000, payable in varying amounts through March
 2007
          and
          options to purchase 359,375 shares of common stock of the Company,
          all
 of
          which
          have been accrued as of December 31, 2003.
 
 In
          February 2000, a former consultant commenced an action against the
 Company
          and its directors, alleging breach of contract and fiduciary duty,
          and
 is
          seeking consulting fees in the amount of: (1) 250,000 shares of common
          stock,
 (2)
          $192,000 and (3) costs of this action. The Company and counsel do
          not
 believe
          the consulting fees are due and will continue to vigorously defend
          this
 action.
  14.
            Stockholders' Equity
  During
              2004, the Company was listed as a public company on the OTC Bulletin
              Board. All
              of the transactions reported in Note 14 - Stockholders’ Equity had fair market
              valuations based on the publicly listed closing prices of the Company’s common
              stock for the pertinent transaction dates. Such publicly listed valuations
              are
              in accordance with the guidance provided by SFAS 123 and EITF
              96-18
 Common
              Stock
 
 During
              the year ended December 31, 2003, the Company issued an aggregate of
              444,805
              shares of common stock to a stockholder and an officer in payment of
              notes and
              loans and deferred payroll of $20,000 and compensation of $30,000.
 
 In
              August
              2003, the Company sold 500,000 shares of common stock for $20,000.
 
 In
              December 2003, an officer exercised options to purchase 166,667 shares
              of common
              stock for $6,667.
 
 In
              December 2003, the Company issued 100,000 shares of common stock in
              exchange for
              financial consulting services of $10,000.
  During
              the year ended December 31, 2004, the Company issued an aggregate of
              2,660,034
              shares of common stock to a stockholder and three officers in payment
              of notes
              and loans of $10,000, deferred payroll of $$50,000 and benefits of
              $125,262.
  F-12
  
 
 In
              November 2004, the Company exchanged 6,000,000 shares of common
              stock
 for
              $240,000 of professional consulting services over a one-year term.
              As of
              December 31, 2004, the remaining balance of services to be rendered
              was
              $210,000, which is reflected as Stock Subscription Receivable in the
              Stockholders’ Deficit.
 
 During
              2004, the Company was listed as a public company on the OTC Bulletin
              Board. All
              of the transactions reported in the preceding discussion had fair market
              valuations based on the publicly listed closing prices of the Company’s common
              stock for the pertinent transaction dates. Such publicly listed valuations
              are
              in accordance with the guidance of SFAS 123 and EITF 96-18.
 
 Preferred
              Stock
  During
              the year ended December 31, 2002, 31.5 shares of Series B were converted
              into
              949,464 shares of common stock at prices of $.0525 to $.15, per share.
              During
              the year ended December 31, 2003, 45 shares of Series B were converted
              into
              1,843,322 shares of common stock at prices of $.0163 to $.0325, per
              share.
 
 Series
              D
 
 The
              Company has designated 1,250,000 shares of 5% cumulative convertible
              preferred
              stock (Series D), which are entitled to receive, prior to the payment
              of
              dividends to the common stock, cumulative dividends of 5%, per share,
              per annum.
              The Series D stock may be redeemed at the option of the Company, in
              cash at
              $2.40, per share. In addition, Series D stockholders are entitled to
              a
              liquidation preference of $2.40, per share, plus unpaid dividends.
              Each share of
              Series D is initially convertible into three shares of common
              stock.
 
 In
              December 2004, the Company sold 20,833 shares of Series D preferred
              stock to a
              customer for $50,000. The Company will also sell similar amounts on
              March 31,
              June 30,
 September
              30 and December 31, 2005.
  F-13
  
 Series
              E
 
 In
              August
              2003, the Company designated 2000 shares of 5% cumulative
              convertible
 preferred
              stock (Series E), which are entitled to receive, prior to the payment
              of
              dividends to the Series D and common stock, cumulative dividends of
              5%, per
              share, per annum. The Series E stock may be redeemed at the option
              of the
              Company, in cash, at 135% of the stated value, per share, plus all
              unpaid
              dividends. In addition, Series E stockholders are entitled to a liquidation
              preference of $1,000, per share, plus all unpaid dividends. Each share
              of Series
              E is convertible into shares of common stock at the lesser of $1.10
              or 80% of
              market value, as defined. In August 2006, the Company is required to
              convert all
              the Series E into common stock at the conversion price, unless the
              holder
              becomes a 5% or greater stockholder. The Company may redeem the Series
              E in cash
              at $1,350, per share, plus all unpaid dividends, as defined.
 
 On
              August
              5, 2003, the Company exchanged 122 shares of Series B and 250 shares
              of Series
              C, all the outstanding shares, for 522 shares of Series E.
 
 In
              2004
              and 2003, 80 and 30 shares of Series E were converted into 1,790,341
              and 340,909
              shares of common stock at prices ranging from $.03 to $.09, per
              share.
 
 Holders
              of preferred shares have no voting rights.
 
 As
              of
              December 31, 2004, cumulative dividends in arrears on preferred stock
              were:
  Series
                        D
                    
                    $
                    36,736Series
                        E
                    
                    
                    30,994$
                    67,730
 
 
 Non
              Plan
              Options
 
 During
              the year ended December 31, 2003, the Company issued options to purchase
              an
              aggregate of 6,200,000 shares of common stock of the Company to officers,
              directors and others. The options are exercisable at $.04 to $.25,
              per share,
              through various dates until November 2008 and were valued at $36,400.
              Certain of
              these options to officers and directors vest over three years.
 
 During
              the year ended December 31, 2004, the Company issued options to purchase
              an
              aggregate of 1,050,000 shares of common stock of the Company to two
              officers and
              an employee. The options are exercisable at $.04, per share, through
              December
              2009 and were valued at $4,000.
 
 During
              2004 and 2003, options to purchase 4,850,000 and 1,763,941 shares,
              respectively,
              of common stock expired or were cancelled without being exercised.
 9.
 
 Reserved
              Shares
 
 As
              of
              December 31, 2004, the Company has reserved shares of common stock
              as
              follows:
 
  Non-plan
                        options and warrants
                    
                    
                    9,280,172Options
                        under the Plans
                    
                    
                    1,335,000Series
                        D conversions
                    
                    
                    375,000Series
                        E conversions(a)
                    
                    
                    4,027,218Litigation
                    
                    
                    250,00015,267,390
 
 
 (a)
              assumes conversions as of December 31, 2004 at $.11, per
              share.
 
 15.
          Stock
          Option Plans
 
 The
          1996
          Stock Option Plan (Plan) is administered by the Board of Directors
 or
          a
          committee thereof and options to purchase 4,709,219 shares of common
          stock
 may
          be
          granted under the Plan to directors, employees (including officers)
          and
 consultants
          to the Company. The Plan authorizes the issuance of incentive stock
 options
          (ISO's), as defined in Section 422A of the Internal Revenue Code of
 1986,
          as
          amended, and non-qualified stock options (NQSO's). Consultants and
 directors
          who are not also employees of the Company are eligible for grants
          of
 only
          NQSOs. The exercise price of each ISO may not be less than 100% of the
          fair
 market
          value of the common stock at the time of grant, except that in the
          case
 of
          a
          grant to an employee who owns 10% or more of the outstanding stock of
          the
 Company
          or a subsidiary or parent of the Company, the exercise price may not
          be
 less
          than
          110% of the fair market value on the date of grant. The aggregate
          fair
 market
          value of the shares covered by ISO's granted under the Plan that
          become
 exercisable
          by a Plan participant for the first time in any calendar year is
 subject
          to a $100,000 limitation. The exercise price of each NQSO is
          determined
 by
          the
          Board, or committee thereof, in its discretion; provided that
          NQSO's
 granted
          a
          10% Stockholder be no less than 110% of the fair market value on
          the
 date
          of
          grant.
  Under
          the
          1998 Stock Option Plan (98 Plan), the Company may grant options to
 purchase
          300,000 shares of common stock to employees, directors, independent
 contractors
          and consultants of the Company. The 98 Plan is similar to the Plan
 and
          authorizes the issuance of ISO's, NQSO's and Stock Appreciation
          Rights.
  Under
          the
          2000 Stock Option Plan (2000 Plan), the Company may grant options
 to
          purchase 2,000,000 shares of common stock to employees, directors,
 independent
          contractors and consultants of the Company. The Plan includes
 options
          to purchase an addition 250,000 shares of common stock, reserved for
          an
 Industrial
          and Scientific Advisory Committee to be formed as necessitated by
          the
 Company.
 
 The
          following table summarizes the activity of the Plans for 2004 and
          2003.
 
 2004
                  2003Weighted
                  
                  WeightedAverage
                  
                  AverageExercise
                  
                  ExerciseShares
                  Price
                  Shares
                  PriceOptions
                      outstanding, beginning of year
                  1,335,000
                  $0.70
                  2,569,000
                  $1.20Granted
                  None
                  -
                  NoneCanceled,
                      exercised, expired or exchanged
                  None
                  -
                  (1,234,000)
                  $1.74Options
                      outstanding, end of year
                  1,335,000
                  $0.70
                  1,335,000
                  $0.70Options
                      exercisable, end of year
                  1,335,000
                  $0.70
                  1,335,000
                  $0.70Options
                      available for grant, end of year
                  1,050,000
                  
                  1,050,000Weighted-average
                      fair value of options grantedduring
                      the year
                  $.00
                  
                  $.00
 
  F-14
 
 
 
 
 The
          following table summarizes information about stock options
          outstanding
 under
          the
          Plan at December 31, 2004:
 
 ****
                **Weighted**
                ****
                ********
                ****
                **Average**
                ****
                **Weighted******
                ****
                **Remaining**
                ****
                **Average****Range
                    of**
                **Outstanding**
                **Contractual**
                **Exercisable**
                **Exercisable****Exercise
                    Prices**
                **Options**
                **Life
                    (Years)**
                **Options**
                **Price**$3.50
                65,000
                2.50
                65,000
                $3.50$2.00
                70,000
                3.00
                70,000
                $2.00$0.675
                650,000
                .50
                650,000
                $0.675$0.50
                100,000
                6.25
                100,000
                $0.50$0.24
                35,000
                8.00
                35,000
                $0.24$0.20
                60,000
                1.75
                60,000
                $0.20$0.15
                355,000
                5.50
                355,000
                $0.15$0.15
                    to $3.50
                1,335,000
                2.70
                1,335,000
                $0.70
 
 
 16.
          Revenues
 
 Sales
          of
          Technology
 
 Through
          September 1, 2003, the Company licensed the non-exclusive,
          worldwide
 use
          of
          the Company's patents for the manufacture, use and marketing of its
 auto-disable
          syringes providing for royalties on sales. In December 2003, the
          Company
 sold
          this
          license and assigned certain patents to a creditor in payment of $99,433
 and
          also
          assigned certain future royalties under the auto-disable syringe
 licensing
          agreement. The Company has licensed back the rights under these
 patents
          to market and manufacture in North America.
 
 
 Note
                17 - Concentrations
 
 The
                Company purchased 99% of its pharmaceutical drugs for its group purchasing
                service from one vendor. This supplier is not a related party as
                defined in SFAS
                57. The arrangement requires the Company to pay for the drugs within
                forty five
                days after the respective period month-end.
 The
                      Company maintains a corporate group purchasing sales arrangements
                      with an
                      affiliated company, Pharmacy Services, Inc. (PSI), which is
                      a related party as
                      defined in SFAS 57. This related party is a private company
                      wholly owned by the
                      President of Univec, Inc. The president of Univec, Inc. is
                      also a significant
                      shareholder of Univec, Inc.. The Company, through its wholly
                      owned subsidiary
                      Physicians and Pharmaceutical Services, Inc. (PPSI), sells certain
                      pharmaceutical drugs to PSI at competitive corporate group
                      purchasing
                      competitive prices. PSI paid $19,046,224 for pharmaceutical
                      drugs to PPS I
                      during 2004. PSI must pay the Company for such goods within
                      thirty days of the
                      appropriate month-end. PSI pays the Company a specified price,
                      which is based on
                      the cost of the drugs as determined by the Company’s market experience with its
                      non-related providers. PPSI purchases these drugs at competitive
                      rates from a
                      national pharmaceutical drug manufacturer.
 
 Revenue
                      Recognition
 
 The
                      Company utilizes the gross sales method of recognizing the
                      amount of revenue
                      from product sales. This method is influenced by several factors
                      as defined by
                      EITF 99-19, which the Company’s market agreement has indicated to be in
                      accordance with the gross sales method, The most significant
                      factors under the
                      agreement include: the Company, rather than the supplier is
                      the primary obligor
                      in the arrangement, the Company retains absolute control over
                      which product is
                      supplied to the user, the Company retains control over selection
                      of the
                      pharmaceutical drug supplier, the Company defines the product
                      specifications for
                      the drugs utilized, the Company maintains the credit risk under
                      the arrangement.
                      However, the supplier maintains the general inventory risk
                      until the point when
                      the pharmaceutical drug is administered to the patient in compliance
                      with the
“just in time” inventory method.
 Sales
                              Cost Adjustments
 For
                          the
                          year-end December 31, 2003, the Company recognized $381,949
                          of cost
                          adjustments provided to the Company’s group purchasing customer as general
                          and administrative expenses. However, EITF 01-9 requires
                          that such cost
                          adjustments be reported as a reduction of revenues. This
                          reclassification is
                          reported on the enclosed Statement of Operations for year-end
                          December 31, 2003.
                          No such cost adjustment payments have been made to any
                          customer after that
                          time.
 
 Distributor
                  Arrangements
 
 The
                  Company markets its syringe products exclusively through distributors
                  and
                  various government agencies. Accounts receivable balances are payable
                  within
                  thirty days of shipment. Univec provides a product quality warranty
                  on its
                  products. The Company has never had any of its products returned
                  due to product
                  deficiencies. The products are priced under competitive arrangements
                  with each
                  customer. The product revenue recognition is based upon the prices
                  charged to
                  each customer. The Company has no price concessions which allow
                  payments below
                  the agreed prices.
 
 
 Product
                  Warranties
 
 The
                  Company provides a product warranty for the products sold. However,
                  the Company
                  has never had a product returned due to defective quality. Further,
                  there are no
                  warranty costs recognized in any of the years ended December 31,
                  2004 and 2003.
                  The Company believes that because no warranty costs were incurred
                  during any of
                  the periods mentioned, there is no need to disclose any additional
                  warranty cost
                  policy or amounts.
 Note
                18, Discontinued Operations - Page 15
 
 The
                Company recognized a loss of $597,056 on the 2004 sale of Thermal
                Waste
                Technology Corporation (TWT) a wholly owned subsidiary. This loss
                included a
                $554,542 write-off for the total impairment of goodwill attributable
                to the
                subsidiary. TWT was sold to an officer of the Company and his related
                parties,
                all former owners of TWT, in exchange for 404,154 shares of common
                stock of the
                Company, cancellation of deferred compensation to the officer of
                $221,042 and
                cancellation of the officer’s employment agreement. In addition, the officer
                received options to purchase 97,710 shares of common stock of the
                Company,
                exercisable at $.01, per share, for 10 years and the other purchasers
                received
                option to purchase 296,444 shares of common stock of the Company,
                exercisable at
                $.07, per share, for 10 years. The officer also will receive $100,000
                in cash,
                payable in monthly installments of $10,000, commencing August 2004
                and medical
                insurance payments of $3,600. All of the Univec, Inc. common stock
                and options
                exchanged in the transaction was valued at publicly listed closing
                prices of the
                Company’s common stock. Such publicly listed valuations are in accordance
                with
                the guidance of SFAS 123 and EITF 96-18.
 
 During
                the year-ended December 31, 2003 the Company reported that a corporate
                officer
                had instituted a legal action for approximately $200,000 for wages
                plus
                approximately $12,000 related to health and dental insurance premiums
                plus
                interest. All amounts within the claim were previously accrued by
                the Company as
                operating expenses as they were incurred. However, the Company’s defense in the
                matter included a claim that the officer had entered into one or
                more agreements
                with third parties on behalf of the Company without notifying the
                Company’s
                President or Board of Directors. The Company asserted that damages
                to the
                Company in excess of the alleged liability to the officer had been
                incurred.
 F-15
 19.
                Goodwill
  Goodwill
                had represented the excess purchase prices paid by the Company over
                the
 fair
                value of the tangible and other intangible assets and liabilities
                at
                the
 dates
                of acquisitions. Goodwill had not been amortized, but instead was
 subject
                to an annual assessment of impairment by applying a fair-value based
 test.
                The Company evaluated the carrying value of goodwill as of December
                31,
                2004.
 The
                Company determined the carrying value of goodwill has been fully
                impaired and
                has
 written-off
                the carrying value of $1,774,119.
  20.
                Subsequent Events
   Common
                Stock
   In
                January 2005, 30 shares of Series E and unpaid dividends thereon
                of $2,188 were
 converted
                into 804,688 shares of common stock at $.04, per share.
  In
                January 2005, the Company issued an aggregate of 1,037,980 shares
                of common
                stock to
 three
                officers of the Company in exchange for deferred compensation of
                $60,000 and
                accrued
 expenses
                of $17,158.
   In
                February 2005, the Company issued 50,000 shares of common stock to
                an officer in
 payment
                of deferred compensation of $5,000.
   In
                March 2005, the Company sold 350,000 shares of common stock to two
                investors
                for
 an
                aggregate of $35,000.
   Due
                to Affiliated Companies and Officers
   Subsequent
                to December 31, 2004, the Company borrowed an additional $70,000
                from
                the
 affiliated
                companies.
     F-16